Correlation Between Cerberus Cyber and Arena Group

Can any of the company-specific risk be diversified away by investing in both Cerberus Cyber and Arena Group 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 Cerberus Cyber and Arena Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cerberus Cyber Sentinel and Arena Group Holdings, you can compare the effects of market volatilities on Cerberus Cyber and Arena Group 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 Cerberus Cyber with a short position of Arena Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cerberus Cyber and Arena Group.

Diversification Opportunities for Cerberus Cyber and Arena Group

-0.4

Correlation Coefficient

Cerberus Cyber  Arena Group

Very good diversification

The 3 months correlation between Cerberus and Arena is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cerberus Cyber Sentinel and Arena Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arena Group Holdings and Cerberus Cyber 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 Cerberus Cyber Sentinel are associated (or correlated) with Arena Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arena Group Holdings has no effect on the direction of Cerberus Cyber i.e., Cerberus Cyber and Arena Group go up and down completely randomly.

Pair Corralation between Cerberus Cyber and Arena Group

Given the investment horizon of 90 days Cerberus Cyber Sentinel is expected to under-perform the Arena Group. In addition to that, Cerberus Cyber is 1.78 times more volatile than Arena Group Holdings. It trades about -0.28 of its total potential returns per unit of risk. Arena Group Holdings is currently generating about 0.08 per unit of volatility. If you would invest  141.00  in Arena Group Holdings on December 29, 2024 and sell it today you would earn a total of  27.00  from holding Arena Group Holdings or generate 19.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cerberus Cyber Sentinel  vs.  Arena Group Holdings

Cerberus Cyber Sentinel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cerberus Cyber Sentinel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Arena Group Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Arena Group Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Arena Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cerberus Cyber and Arena Group

The main advantage of trading using opposite Cerberus Cyber and Arena Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cerberus Cyber position performs unexpectedly, Arena Group 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 Arena Group will offset losses from the drop in Arena Group's long position.

The idea behind Cerberus Cyber Sentinel and Arena Group Holdings 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.