Correlation Between Cerberus Cyber and Kambi Group

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

Diversification Opportunities for Cerberus Cyber and Kambi Group

-0.84

Correlation Coefficient

Cerberus Cyber  Kambi Group

Pay attention - limited upside

The 3 months correlation between Cerberus and Kambi is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Cerberus Cyber Sentinel and Kambi Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kambi Group 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 Kambi Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kambi Group plc has no effect on the direction of Cerberus Cyber i.e., Cerberus Cyber and Kambi Group go up and down completely randomly.

Pair Corralation between Cerberus Cyber and Kambi Group

Given the investment horizon of 90 days Cerberus Cyber Sentinel is expected to generate 3.13 times more return on investment than Kambi Group. However, Cerberus Cyber is 3.13 times more volatile than Kambi Group plc. It trades about 0.26 of its potential returns per unit of risk. Kambi Group plc is currently generating about -0.13 per unit of risk. If you would invest  72.00  in Cerberus Cyber Sentinel on September 27, 2024 and sell it today you would earn a total of  172.00  from holding Cerberus Cyber Sentinel or generate 238.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Cerberus Cyber Sentinel  vs.  Kambi Group plc

Cerberus Cyber Sentinel

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cerberus Cyber Sentinel are ranked lower than 20 (%) 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.

Kambi Group plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kambi Group plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Cerberus Cyber and Kambi Group

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

The idea behind Cerberus Cyber Sentinel and Kambi Group 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.