Correlation Between CyberArk Software and SCOTT TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both CyberArk Software and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CyberArk Software and SCOTT TECHNOLOGY, you can compare the effects of market volatilities on CyberArk Software and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of CyberArk Software and SCOTT TECHNOLOGY.
Diversification Opportunities for CyberArk Software and SCOTT TECHNOLOGY
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CyberArk and SCOTT is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding CyberArk Software and SCOTT TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTT TECHNOLOGY has no effect on the direction of CyberArk Software i.e., CyberArk Software and SCOTT TECHNOLOGY go up and down completely randomly.
Pair Corralation between CyberArk Software and SCOTT TECHNOLOGY
Assuming the 90 days trading horizon CyberArk Software is expected to generate 0.82 times more return on investment than SCOTT TECHNOLOGY. However, CyberArk Software is 1.23 times less risky than SCOTT TECHNOLOGY. It trades about 0.18 of its potential returns per unit of risk. SCOTT TECHNOLOGY is currently generating about 0.0 per unit of risk. If you would invest 21,310 in CyberArk Software on November 3, 2024 and sell it today you would earn a total of 14,270 from holding CyberArk Software or generate 66.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CyberArk Software vs. SCOTT TECHNOLOGY
Performance |
| Timeline |
| CyberArk Software |
| SCOTT TECHNOLOGY |
CyberArk Software and SCOTT TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CyberArk Software and SCOTT TECHNOLOGY
The main advantage of trading using opposite CyberArk Software and SCOTT TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CyberArk Software position performs unexpectedly, SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY will offset losses from the drop in SCOTT TECHNOLOGY's long position.| CyberArk Software vs. Pembina Pipeline Corp | CyberArk Software vs. ARDAGH METAL PACDL 0001 | CyberArk Software vs. NorAm Drilling AS | CyberArk Software vs. Air New Zealand |
| SCOTT TECHNOLOGY vs. Mitsui Chemicals | SCOTT TECHNOLOGY vs. INDO RAMA SYNTHETIC | SCOTT TECHNOLOGY vs. MAGIC SOFTWARE ENTR | SCOTT TECHNOLOGY vs. Check Point Software |
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.
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