Correlation Between CyberArk Software and Vale SA
Can any of the company-specific risk be diversified away by investing in both CyberArk Software and Vale SA 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 Vale SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CyberArk Software and Vale SA, you can compare the effects of market volatilities on CyberArk Software and Vale SA 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 Vale SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CyberArk Software and Vale SA.
Diversification Opportunities for CyberArk Software and Vale SA
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CyberArk and Vale is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding CyberArk Software and Vale SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vale SA 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 Vale SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vale SA has no effect on the direction of CyberArk Software i.e., CyberArk Software and Vale SA go up and down completely randomly.
Pair Corralation between CyberArk Software and Vale SA
Assuming the 90 days trading horizon CyberArk Software is expected to generate 1.16 times more return on investment than Vale SA. However, CyberArk Software is 1.16 times more volatile than Vale SA. It trades about 0.17 of its potential returns per unit of risk. Vale SA is currently generating about -0.05 per unit of risk. If you would invest 24,030 in CyberArk Software on October 18, 2024 and sell it today you would earn a total of 9,610 from holding CyberArk Software or generate 39.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CyberArk Software vs. Vale SA
Performance |
| Timeline |
| CyberArk Software |
| Vale SA |
CyberArk Software and Vale SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CyberArk Software and Vale SA
The main advantage of trading using opposite CyberArk Software and Vale SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CyberArk Software position performs unexpectedly, Vale SA 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 Vale SA will offset losses from the drop in Vale SA's long position.| CyberArk Software vs. ETFS Coffee ETC | CyberArk Software vs. United Utilities Group | CyberArk Software vs. Coffee Holding Co | CyberArk Software vs. AM EAGLE OUTFITTERS |
| Vale SA vs. CyberArk Software | Vale SA vs. New Residential Investment | Vale SA vs. MidCap Financial Investment | Vale SA vs. EAT WELL INVESTMENT |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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