Correlation Between CyberArk Software and CHINA SHENHUA
Can any of the company-specific risk be diversified away by investing in both CyberArk Software and CHINA SHENHUA 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 CHINA SHENHUA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CyberArk Software and CHINA SHENHUA ENA, you can compare the effects of market volatilities on CyberArk Software and CHINA SHENHUA 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 CHINA SHENHUA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CyberArk Software and CHINA SHENHUA.
Diversification Opportunities for CyberArk Software and CHINA SHENHUA
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CyberArk and CHINA is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding CyberArk Software and CHINA SHENHUA ENA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA SHENHUA ENA 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 CHINA SHENHUA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA SHENHUA ENA has no effect on the direction of CyberArk Software i.e., CyberArk Software and CHINA SHENHUA go up and down completely randomly.
Pair Corralation between CyberArk Software and CHINA SHENHUA
Assuming the 90 days trading horizon CyberArk Software is expected to generate 0.84 times more return on investment than CHINA SHENHUA. However, CyberArk Software is 1.19 times less risky than CHINA SHENHUA. It trades about 0.1 of its potential returns per unit of risk. CHINA SHENHUA ENA is currently generating about 0.07 per unit of risk. If you would invest 18,670 in CyberArk Software on September 4, 2024 and sell it today you would earn a total of 12,010 from holding CyberArk Software or generate 64.33% 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. CHINA SHENHUA ENA
Performance |
| Timeline |
| CyberArk Software |
| CHINA SHENHUA ENA |
CyberArk Software and CHINA SHENHUA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CyberArk Software and CHINA SHENHUA
The main advantage of trading using opposite CyberArk Software and CHINA SHENHUA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CyberArk Software position performs unexpectedly, CHINA SHENHUA 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 CHINA SHENHUA will offset losses from the drop in CHINA SHENHUA's long position.| CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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