Correlation Between CyberArk Software and Choice Hotels
Can any of the company-specific risk be diversified away by investing in both CyberArk Software and Choice Hotels 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 Choice Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CyberArk Software and Choice Hotels International, you can compare the effects of market volatilities on CyberArk Software and Choice Hotels 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 Choice Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of CyberArk Software and Choice Hotels.
Diversification Opportunities for CyberArk Software and Choice Hotels
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CyberArk and Choice is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding CyberArk Software and Choice Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choice Hotels Intern 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 Choice Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choice Hotels Intern has no effect on the direction of CyberArk Software i.e., CyberArk Software and Choice Hotels go up and down completely randomly.
Pair Corralation between CyberArk Software and Choice Hotels
Assuming the 90 days trading horizon CyberArk Software is expected to generate 1.12 times more return on investment than Choice Hotels. However, CyberArk Software is 1.12 times more volatile than Choice Hotels International. It trades about 0.24 of its potential returns per unit of risk. Choice Hotels International is currently generating about 0.12 per unit of risk. If you would invest 32,790 in CyberArk Software on November 3, 2024 and sell it today you would earn a total of 2,790 from holding CyberArk Software or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CyberArk Software vs. Choice Hotels International
Performance |
| Timeline |
| CyberArk Software |
| Choice Hotels Intern |
CyberArk Software and Choice Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CyberArk Software and Choice Hotels
The main advantage of trading using opposite CyberArk Software and Choice Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CyberArk Software position performs unexpectedly, Choice Hotels 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 Choice Hotels will offset losses from the drop in Choice Hotels' long position.| CyberArk Software vs. Perseus Mining Limited | CyberArk Software vs. OFFICE DEPOT | CyberArk Software vs. MAG SILVER | CyberArk Software vs. MINCO SILVER |
| Choice Hotels vs. QBE Insurance Group | Choice Hotels vs. Granite Construction | Choice Hotels vs. Federal Agricultural Mortgage | Choice Hotels vs. WIMFARM SA EO |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |