Correlation Between CyberArk Software and Intercontinental
Can any of the company-specific risk be diversified away by investing in both CyberArk Software and Intercontinental 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 Intercontinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CyberArk Software and Intercontinental Exchange, you can compare the effects of market volatilities on CyberArk Software and Intercontinental 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 Intercontinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of CyberArk Software and Intercontinental.
Diversification Opportunities for CyberArk Software and Intercontinental
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CyberArk and Intercontinental is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding CyberArk Software and Intercontinental Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intercontinental Exchange 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 Intercontinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intercontinental Exchange has no effect on the direction of CyberArk Software i.e., CyberArk Software and Intercontinental go up and down completely randomly.
Pair Corralation between CyberArk Software and Intercontinental
Assuming the 90 days trading horizon CyberArk Software is expected to generate 3.54 times more return on investment than Intercontinental. However, CyberArk Software is 3.54 times more volatile than Intercontinental Exchange. It trades about 0.07 of its potential returns per unit of risk. Intercontinental Exchange is currently generating about 0.11 per unit of risk. If you would invest 28,170 in CyberArk Software on September 13, 2024 and sell it today you would earn a total of 1,180 from holding CyberArk Software or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CyberArk Software vs. Intercontinental Exchange
Performance |
| Timeline |
| CyberArk Software |
| Intercontinental Exchange |
CyberArk Software and Intercontinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CyberArk Software and Intercontinental
The main advantage of trading using opposite CyberArk Software and Intercontinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CyberArk Software position performs unexpectedly, Intercontinental 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 Intercontinental will offset losses from the drop in Intercontinental's long position.| CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc |
| Intercontinental vs. CME Group | Intercontinental vs. Hong Kong Exchanges | Intercontinental vs. London Stock Exchange | Intercontinental vs. Deutsche Brse AG |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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