Correlation Between SMA Solar and CyberArk Software
Can any of the company-specific risk be diversified away by investing in both SMA Solar 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 SMA Solar and CyberArk Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMA Solar Technology and CyberArk Software, you can compare the effects of market volatilities on SMA Solar 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 SMA Solar with a short position of CyberArk Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and CyberArk Software.
Diversification Opportunities for SMA Solar and CyberArk Software
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SMA and CyberArk is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and CyberArk Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberArk Software and SMA Solar 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 SMA Solar Technology 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 SMA Solar i.e., SMA Solar and CyberArk Software go up and down completely randomly.
Pair Corralation between SMA Solar and CyberArk Software
Assuming the 90 days horizon SMA Solar Technology is expected to under-perform the CyberArk Software. In addition to that, SMA Solar is 1.53 times more volatile than CyberArk Software. It trades about -0.12 of its total potential returns per unit of risk. CyberArk Software is currently generating about 0.28 per unit of volatility. If you would invest 25,310 in CyberArk Software on September 4, 2024 and sell it today you would earn a total of 5,370 from holding CyberArk Software or generate 21.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. CyberArk Software
Performance |
| Timeline |
| SMA Solar Technology |
| CyberArk Software |
SMA Solar and CyberArk Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and CyberArk Software
The main advantage of trading using opposite SMA Solar and CyberArk Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar 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.| SMA Solar vs. Hyatt Hotels | SMA Solar vs. Meli Hotels International | SMA Solar vs. Xenia Hotels Resorts | SMA Solar vs. ANTA SPORTS PRODUCT |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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