Correlation Between Cerberus Cyber and Ferrexpo PLC

Can any of the company-specific risk be diversified away by investing in both Cerberus Cyber and Ferrexpo PLC 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 Ferrexpo PLC 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 Ferrexpo PLC, you can compare the effects of market volatilities on Cerberus Cyber and Ferrexpo PLC 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 Ferrexpo PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cerberus Cyber and Ferrexpo PLC.

Diversification Opportunities for Cerberus Cyber and Ferrexpo PLC

0.69

Correlation Coefficient

Cerberus Cyber  Ferrexpo PLC

Poor diversification

The 3 months correlation between Cerberus and Ferrexpo is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Cerberus Cyber Sentinel and Ferrexpo PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrexpo PLC 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 Ferrexpo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrexpo PLC has no effect on the direction of Cerberus Cyber i.e., Cerberus Cyber and Ferrexpo PLC go up and down completely randomly.

Pair Corralation between Cerberus Cyber and Ferrexpo PLC

Given the investment horizon of 90 days Cerberus Cyber Sentinel is expected to under-perform the Ferrexpo PLC. In addition to that, Cerberus Cyber is 1.64 times more volatile than Ferrexpo PLC. It trades about -0.01 of its total potential returns per unit of risk. Ferrexpo PLC is currently generating about 0.01 per unit of volatility. If you would invest  195.00  in Ferrexpo PLC on September 30, 2024 and sell it today you would lose (72.00) from holding Ferrexpo PLC or give up 36.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.6%
Values	Daily Returns

Cerberus Cyber Sentinel  vs.  Ferrexpo PLC

Cerberus Cyber Sentinel

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cerberus Cyber Sentinel are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Cerberus Cyber displayed solid returns over the last few months and may actually be approaching a breakup point.

Ferrexpo PLC

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ferrexpo PLC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Ferrexpo PLC reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cerberus Cyber and Ferrexpo PLC

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

The idea behind Cerberus Cyber Sentinel and Ferrexpo PLC 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.