Correlation Between CyberArk Software and ELECOM CO
Can any of the company-specific risk be diversified away by investing in both CyberArk Software and ELECOM CO 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 ELECOM CO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CyberArk Software and ELECOM LTD, you can compare the effects of market volatilities on CyberArk Software and ELECOM CO 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 ELECOM CO. Check out your portfolio center. Please also check ongoing floating volatility patterns of CyberArk Software and ELECOM CO.
Diversification Opportunities for CyberArk Software and ELECOM CO
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between CyberArk and ELECOM is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding CyberArk Software and ELECOM LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELECOM LTD 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 ELECOM CO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELECOM LTD has no effect on the direction of CyberArk Software i.e., CyberArk Software and ELECOM CO go up and down completely randomly.
Pair Corralation between CyberArk Software and ELECOM CO
Assuming the 90 days trading horizon CyberArk Software is expected to generate 3.03 times more return on investment than ELECOM CO. However, CyberArk Software is 3.03 times more volatile than ELECOM LTD. It trades about 0.09 of its potential returns per unit of risk. ELECOM LTD is currently generating about 0.07 per unit of risk. If you would invest 27,780 in CyberArk Software on September 12, 2024 and sell it today you would earn a total of 1,570 from holding CyberArk Software or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CyberArk Software vs. ELECOM LTD
Performance |
| Timeline |
| CyberArk Software |
| ELECOM LTD |
CyberArk Software and ELECOM CO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CyberArk Software and ELECOM CO
The main advantage of trading using opposite CyberArk Software and ELECOM CO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CyberArk Software position performs unexpectedly, ELECOM CO 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 ELECOM CO will offset losses from the drop in ELECOM CO's long position.| CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc |
| ELECOM CO vs. Corsair Gaming | ELECOM CO vs. Datalogic SpA | ELECOM CO vs. Superior Plus Corp | ELECOM CO vs. SIVERS SEMICONDUCTORS AB |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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