Correlation Between KINGBOARD CHEMICAL and CyberArk Software
Can any of the company-specific risk be diversified away by investing in both KINGBOARD CHEMICAL and CyberArk Software 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 KINGBOARD CHEMICAL and CyberArk Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGBOARD CHEMICAL and CyberArk Software, you can compare the effects of market volatilities on KINGBOARD CHEMICAL and CyberArk Software 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 KINGBOARD CHEMICAL with a short position of CyberArk Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGBOARD CHEMICAL and CyberArk Software.
Diversification Opportunities for KINGBOARD CHEMICAL and CyberArk Software
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KINGBOARD and CyberArk is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL and CyberArk Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberArk Software and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL are associated (or correlated) with CyberArk Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberArk Software has no effect on the direction of KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and CyberArk Software go up and down completely randomly.
Pair Corralation between KINGBOARD CHEMICAL and CyberArk Software
Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to generate 1.67 times more return on investment than CyberArk Software. However, KINGBOARD CHEMICAL is 1.67 times more volatile than CyberArk Software. It trades about 0.07 of its potential returns per unit of risk. CyberArk Software is currently generating about 0.1 per unit of risk. If you would invest 140.00 in KINGBOARD CHEMICAL on September 2, 2024 and sell it today you would earn a total of 84.00 from holding KINGBOARD CHEMICAL or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KINGBOARD CHEMICAL vs. CyberArk Software
Performance |
| Timeline |
| KINGBOARD CHEMICAL |
| CyberArk Software |
KINGBOARD CHEMICAL and CyberArk Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGBOARD CHEMICAL and CyberArk Software
The main advantage of trading using opposite KINGBOARD CHEMICAL and CyberArk Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL position performs unexpectedly, CyberArk Software 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 CyberArk Software will offset losses from the drop in CyberArk Software's long position.| KINGBOARD CHEMICAL vs. G8 EDUCATION | KINGBOARD CHEMICAL vs. Tower Semiconductor | KINGBOARD CHEMICAL vs. DeVry Education Group | KINGBOARD CHEMICAL vs. Nordic Semiconductor ASA |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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