Correlation Between CyberArk Software and Prudential Plc

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both CyberArk Software and Prudential Plc 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 Prudential Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CyberArk Software and Prudential plc, you can compare the effects of market volatilities on CyberArk Software and Prudential Plc 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 Prudential Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of CyberArk Software and Prudential Plc.

Diversification Opportunities for CyberArk Software and Prudential Plc

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between CyberArk and Prudential is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CyberArk Software and Prudential plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential plc 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 Prudential Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential plc has no effect on the direction of CyberArk Software i.e., CyberArk Software and Prudential Plc go up and down completely randomly.

Pair Corralation between CyberArk Software and Prudential Plc

Assuming the 90 days trading horizon CyberArk Software is expected to generate 1.15 times more return on investment than Prudential Plc. However, CyberArk Software is 1.15 times more volatile than Prudential plc. It trades about 0.12 of its potential returns per unit of risk. Prudential plc is currently generating about -0.04 per unit of risk. If you would invest  22,030  in CyberArk Software on September 5, 2024 and sell it today you would earn a total of  8,650  from holding CyberArk Software or generate 39.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CyberArk Software  vs.  Prudential plc

 Performance 
       Timeline  
CyberArk Software 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in CyberArk Software are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, CyberArk Software unveiled solid returns over the last few months and may actually be approaching a breakup point.
Prudential plc 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Prudential plc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Prudential Plc may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CyberArk Software and Prudential Plc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CyberArk Software and Prudential Plc

The main advantage of trading using opposite CyberArk Software and Prudential Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CyberArk Software position performs unexpectedly, Prudential Plc 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 Prudential Plc will offset losses from the drop in Prudential Plc's long position.
The idea behind CyberArk Software and Prudential plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

Other Complementary Tools

Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.