Correlation Between CiT and Tenable Holdings
Can any of the company-specific risk be diversified away by investing in both CiT and Tenable Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CiT and Tenable Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CiT Inc and Tenable Holdings, you can compare the effects of market volatilities on CiT and Tenable Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CiT with a short position of Tenable Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CiT and Tenable Holdings.
Diversification Opportunities for CiT and Tenable Holdings
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CiT and Tenable is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding CiT Inc and Tenable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenable Holdings and CiT is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CiT Inc are associated (or correlated) with Tenable Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenable Holdings has no effect on the direction of CiT i.e., CiT and Tenable Holdings go up and down completely randomly.
Pair Corralation between CiT and Tenable Holdings
Given the investment horizon of 90 days CiT Inc is expected to generate 1.56 times more return on investment than Tenable Holdings. However, CiT is 1.56 times more volatile than Tenable Holdings. It trades about 0.08 of its potential returns per unit of risk. Tenable Holdings is currently generating about -0.02 per unit of risk. If you would invest 430.00 in CiT Inc on November 3, 2024 and sell it today you would earn a total of 266.00 from holding CiT Inc or generate 61.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CiT Inc vs. Tenable Holdings
Performance |
| Timeline |
| CiT Inc |
| Tenable Holdings |
CiT and Tenable Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CiT and Tenable Holdings
The main advantage of trading using opposite CiT and Tenable Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CiT position performs unexpectedly, Tenable Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tenable Holdings will offset losses from the drop in Tenable Holdings' long position.| CiT vs. Global Blue Group | CiT vs. EverCommerce | CiT vs. CSG Systems International | CiT vs. Consensus Cloud Solutions |
| Tenable Holdings vs. Qualys Inc | Tenable Holdings vs. Varonis Systems | Tenable Holdings vs. SentinelOne | Tenable Holdings vs. Rapid7 Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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