Correlation Between CyberArk Software and ANTA SPORTS

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

By analyzing existing cross correlation between CyberArk Software and ANTA SPORTS PRODUCT, you can compare the effects of market volatilities on CyberArk Software and ANTA SPORTS 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 ANTA SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CyberArk Software and ANTA SPORTS.

Diversification Opportunities for CyberArk Software and ANTA SPORTS

-0.59

Correlation Coefficient

CyberArk Software  ANTA SPORTS

Excellent diversification

The 3 months correlation between CyberArk and ANTA is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding CyberArk Software and ANTA SPORTS PRODUCT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA SPORTS PRODUCT 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 ANTA SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA SPORTS PRODUCT has no effect on the direction of CyberArk Software i.e., CyberArk Software and ANTA SPORTS go up and down completely randomly.

Pair Corralation between CyberArk Software and ANTA SPORTS

Assuming the 90 days trading horizon CyberArk Software is expected to generate 1.4 times more return on investment than ANTA SPORTS. However, CyberArk Software is 1.4 times more volatile than ANTA SPORTS PRODUCT. It trades about 0.34 of its potential returns per unit of risk. ANTA SPORTS PRODUCT is currently generating about -0.05 per unit of risk. If you would invest  30,580  in CyberArk Software on October 22, 2024 and sell it today you would earn a total of  3,800  from holding CyberArk Software or generate 12.43% return on investment over 90 days.

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

CyberArk Software  vs.  ANTA SPORTS PRODUCT

CyberArk Software

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CyberArk Software are ranked lower than 11 (%) 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.

ANTA SPORTS PRODUCT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANTA SPORTS PRODUCT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ANTA SPORTS is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CyberArk Software and ANTA SPORTS

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

The idea behind CyberArk Software and ANTA SPORTS PRODUCT 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.