Correlation Between CyberArk Software and STELLA JONES

Can any of the company-specific risk be diversified away by investing in both CyberArk Software and STELLA JONES 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 CyberArk Software and STELLA JONES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CyberArk Software and STELLA JONES INC, you can compare the effects of market volatilities on CyberArk Software and STELLA JONES 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 CyberArk Software with a short position of STELLA JONES. Check out your portfolio center. Please also check ongoing floating volatility patterns of CyberArk Software and STELLA JONES.

Diversification Opportunities for CyberArk Software and STELLA JONES

-0.82

Correlation Coefficient

CyberArk Software  STELLA JONES

Pay attention - limited upside

The 3 months correlation between CyberArk and STELLA is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding CyberArk Software and STELLA JONES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STELLA JONES INC and CyberArk Software 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 CyberArk Software are associated (or correlated) with STELLA JONES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STELLA JONES INC has no effect on the direction of CyberArk Software i.e., CyberArk Software and STELLA JONES go up and down completely randomly.

Pair Corralation between CyberArk Software and STELLA JONES

Assuming the 90 days trading horizon CyberArk Software is expected to under-perform the STELLA JONES. But the stock apears to be less risky and, when comparing its historical volatility, CyberArk Software is 1.02 times less risky than STELLA JONES. The stock trades about -0.02 of its potential returns per unit of risk. The STELLA JONES INC is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  4,652  in STELLA JONES INC on September 27, 2024 and sell it today you would lose (52.00) from holding STELLA JONES INC or give up 1.12% of portfolio value over 90 days.

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

CyberArk Software  vs.  STELLA JONES INC

CyberArk Software

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CyberArk Software are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CyberArk Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

STELLA JONES INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days STELLA JONES INC 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 basic 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 CyberArk Software and STELLA JONES

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

The idea behind CyberArk Software and STELLA JONES INC 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.