Correlation Between CyberArk Software and Guangdong Investment
Can any of the company-specific risk be diversified away by investing in both CyberArk Software and Guangdong Investment 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 Guangdong Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CyberArk Software and Guangdong Investment Limited, you can compare the effects of market volatilities on CyberArk Software and Guangdong Investment 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 Guangdong Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CyberArk Software and Guangdong Investment.
Diversification Opportunities for CyberArk Software and Guangdong Investment
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CyberArk and Guangdong is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding CyberArk Software and Guangdong Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Investment 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 Guangdong Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Investment has no effect on the direction of CyberArk Software i.e., CyberArk Software and Guangdong Investment go up and down completely randomly.
Pair Corralation between CyberArk Software and Guangdong Investment
Assuming the 90 days trading horizon CyberArk Software is expected to generate 0.6 times more return on investment than Guangdong Investment. However, CyberArk Software is 1.67 times less risky than Guangdong Investment. It trades about 0.39 of its potential returns per unit of risk. Guangdong Investment Limited is currently generating about -0.12 per unit of risk. If you would invest 30,580 in CyberArk Software on October 23, 2024 and sell it today you would earn a total of 4,310 from holding CyberArk Software or generate 14.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CyberArk Software vs. Guangdong Investment Limited
Performance |
| Timeline |
| CyberArk Software |
| Guangdong Investment |
CyberArk Software and Guangdong Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CyberArk Software and Guangdong Investment
The main advantage of trading using opposite CyberArk Software and Guangdong Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CyberArk Software position performs unexpectedly, Guangdong Investment 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 Guangdong Investment will offset losses from the drop in Guangdong Investment's long position.| CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc |
| Guangdong Investment vs. FORMPIPE SOFTWARE AB | Guangdong Investment vs. USU Software AG | Guangdong Investment vs. CyberArk Software | Guangdong Investment vs. High Liner Foods |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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