Correlation Between CyberArk Software and Bakkt Holdings
Can any of the company-specific risk be diversified away by investing in both CyberArk Software and Bakkt Holdings 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 Bakkt Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CyberArk Software and Bakkt Holdings, you can compare the effects of market volatilities on CyberArk Software and Bakkt Holdings 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 Bakkt Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CyberArk Software and Bakkt Holdings.
Diversification Opportunities for CyberArk Software and Bakkt Holdings
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CyberArk and Bakkt is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding CyberArk Software and Bakkt Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bakkt Holdings 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 Bakkt Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bakkt Holdings has no effect on the direction of CyberArk Software i.e., CyberArk Software and Bakkt Holdings go up and down completely randomly.
Pair Corralation between CyberArk Software and Bakkt Holdings
Given the investment horizon of 90 days CyberArk Software is expected to generate 3.89 times less return on investment than Bakkt Holdings. But when comparing it to its historical volatility, CyberArk Software is 8.57 times less risky than Bakkt Holdings. It trades about 0.16 of its potential returns per unit of risk. Bakkt Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,703 in Bakkt Holdings on September 1, 2024 and sell it today you would earn a total of 1,082 from holding Bakkt Holdings or generate 63.53% 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. Bakkt Holdings
Performance |
| Timeline |
| CyberArk Software |
| Bakkt Holdings |
CyberArk Software and Bakkt Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CyberArk Software and Bakkt Holdings
The main advantage of trading using opposite CyberArk Software and Bakkt Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CyberArk Software position performs unexpectedly, Bakkt Holdings 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 Bakkt Holdings will offset losses from the drop in Bakkt Holdings' long position.| CyberArk Software vs. F5 Networks | CyberArk Software vs. Qualys Inc | CyberArk Software vs. VeriSign | CyberArk Software vs. Amdocs |
| Bakkt Holdings vs. Arqit Quantum | Bakkt Holdings vs. Alarum Technologies | Bakkt Holdings vs. GigaCloud Technology Class | Bakkt Holdings vs. Pagaya Technologies |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Commodity Directory Find actively traded commodities issued by global exchanges |