Correlation Between CyberArk Software and Associated British
Can any of the company-specific risk be diversified away by investing in both CyberArk Software and Associated British 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 Associated British into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CyberArk Software and Associated British Foods, you can compare the effects of market volatilities on CyberArk Software and Associated British 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 Associated British. Check out your portfolio center. Please also check ongoing floating volatility patterns of CyberArk Software and Associated British.
Diversification Opportunities for CyberArk Software and Associated British
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CyberArk and Associated is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding CyberArk Software and Associated British Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated British Foods 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 Associated British. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated British Foods has no effect on the direction of CyberArk Software i.e., CyberArk Software and Associated British go up and down completely randomly.
Pair Corralation between CyberArk Software and Associated British
Assuming the 90 days trading horizon CyberArk Software is expected to generate 1.81 times more return on investment than Associated British. However, CyberArk Software is 1.81 times more volatile than Associated British Foods. It trades about 0.0 of its potential returns per unit of risk. Associated British Foods is currently generating about -0.21 per unit of risk. If you would invest 30,770 in CyberArk Software on September 24, 2024 and sell it today you would lose (190.00) from holding CyberArk Software or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CyberArk Software vs. Associated British Foods
Performance |
| Timeline |
| CyberArk Software |
| Associated British Foods |
CyberArk Software and Associated British Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CyberArk Software and Associated British
The main advantage of trading using opposite CyberArk Software and Associated British positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CyberArk Software position performs unexpectedly, Associated British 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 Associated British will offset losses from the drop in Associated British's long position.| CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc |
| Associated British vs. Mowi ASA | Associated British vs. LEROY SEAFOOD GRUNSPADR | Associated British vs. Lery Seafood Group | Associated British vs. Nisshin Seifun Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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