Correlation Between Cerberus Cyber and Flywire Corp

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

Diversification Opportunities for Cerberus Cyber and Flywire Corp

0.62

Correlation Coefficient

Cerberus Cyber  Flywire Corp

Poor diversification

The 3 months correlation between Cerberus and Flywire is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cerberus Cyber Sentinel and Flywire Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flywire Corp 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 Flywire Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flywire Corp has no effect on the direction of Cerberus Cyber i.e., Cerberus Cyber and Flywire Corp go up and down completely randomly.

Pair Corralation between Cerberus Cyber and Flywire Corp

Given the investment horizon of 90 days Cerberus Cyber Sentinel is expected to generate 2.49 times more return on investment than Flywire Corp. However, Cerberus Cyber is 2.49 times more volatile than Flywire Corp. It trades about 0.03 of its potential returns per unit of risk. Flywire Corp is currently generating about 0.0 per unit of risk. If you would invest  180.00  in Cerberus Cyber Sentinel on September 15, 2024 and sell it today you would lose (17.00) from holding Cerberus Cyber Sentinel or give up 9.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Cerberus Cyber Sentinel  vs.  Flywire Corp

Cerberus Cyber Sentinel

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cerberus Cyber Sentinel are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Cerberus Cyber displayed solid returns over the last few months and may actually be approaching a breakup point.

Flywire Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Flywire Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Flywire Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cerberus Cyber and Flywire Corp

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

The idea behind Cerberus Cyber Sentinel and Flywire Corp 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.