Correlation Between CyberArk Software and Chalice Mining

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

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

Diversification Opportunities for CyberArk Software and Chalice Mining

-0.7

Correlation Coefficient

CyberArk Software  Chalice Mining

Excellent diversification

The 3 months correlation between CyberArk and Chalice is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding CyberArk Software and Chalice Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chalice Mining 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 Chalice Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chalice Mining has no effect on the direction of CyberArk Software i.e., CyberArk Software and Chalice Mining go up and down completely randomly.

Pair Corralation between CyberArk Software and Chalice Mining

Assuming the 90 days trading horizon CyberArk Software is expected to generate 0.44 times more return on investment than Chalice Mining. However, CyberArk Software is 2.28 times less risky than Chalice Mining. It trades about 0.1 of its potential returns per unit of risk. Chalice Mining Limited is currently generating about -0.05 per unit of risk. If you would invest  11,010  in CyberArk Software on October 4, 2024 and sell it today you would earn a total of  19,540  from holding CyberArk Software or generate 177.48% return on investment over 90 days.

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

CyberArk Software  vs.  Chalice Mining Limited

CyberArk Software

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CyberArk Software are ranked lower than 9 (%) 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.

Chalice Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chalice Mining Limited 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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with CyberArk Software and Chalice Mining

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

The idea behind CyberArk Software and Chalice Mining Limited 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.