Correlation Between CyberArk Software and American Public
Can any of the company-specific risk be diversified away by investing in both CyberArk Software and American Public 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 CyberArk Software and American Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CyberArk Software and American Public Education, you can compare the effects of market volatilities on CyberArk Software and American Public 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 CyberArk Software with a short position of American Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of CyberArk Software and American Public.
Diversification Opportunities for CyberArk Software and American Public
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CyberArk and American is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding CyberArk Software and American Public Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Public Education and CyberArk Software 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 CyberArk Software are associated (or correlated) with American Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Public Education has no effect on the direction of CyberArk Software i.e., CyberArk Software and American Public go up and down completely randomly.
Pair Corralation between CyberArk Software and American Public
Assuming the 90 days trading horizon CyberArk Software is expected to generate 1.1 times less return on investment than American Public. But when comparing it to its historical volatility, CyberArk Software is 1.09 times less risky than American Public. It trades about 0.19 of its potential returns per unit of risk. American Public Education is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,550 in American Public Education on November 6, 2024 and sell it today you would earn a total of 530.00 from holding American Public Education or generate 34.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CyberArk Software vs. American Public Education
Performance |
| Timeline |
| CyberArk Software |
| American Public Education |
CyberArk Software and American Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CyberArk Software and American Public
The main advantage of trading using opposite CyberArk Software and American Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CyberArk Software position performs unexpectedly, American Public 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 American Public will offset losses from the drop in American Public's long position.| CyberArk Software vs. Haverty Furniture Companies | CyberArk Software vs. Lifeway Foods | CyberArk Software vs. Addus HomeCare | CyberArk Software vs. Cal Maine Foods |
| American Public vs. CENTURIA OFFICE REIT | American Public vs. Aristocrat Leisure Limited | American Public vs. TRAVEL LEISURE DL 01 | American Public vs. Neinor Homes SA |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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