Correlation Between CyberArk Software and DAX Index

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Can any of the company-specific risk be diversified away by investing in both CyberArk Software and DAX Index 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 DAX Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CyberArk Software and DAX Index, you can compare the effects of market volatilities on CyberArk Software and DAX Index 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 DAX Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of CyberArk Software and DAX Index.

Diversification Opportunities for CyberArk Software and DAX Index

CyberArkDAXDiversified AwayCyberArkDAXDiversified Away100%
0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between CyberArk and DAX is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding CyberArk Software and DAX Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAX Index 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 DAX Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAX Index has no effect on the direction of CyberArk Software i.e., CyberArk Software and DAX Index go up and down completely randomly.
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Pair Corralation between CyberArk Software and DAX Index

Assuming the 90 days trading horizon CyberArk Software is expected to generate 3.47 times more return on investment than DAX Index. However, CyberArk Software is 3.47 times more volatile than DAX Index. It trades about 0.18 of its potential returns per unit of risk. DAX Index is currently generating about 0.2 per unit of risk. If you would invest  26,580  in CyberArk Software on October 27, 2024 and sell it today you would earn a total of  8,060  from holding CyberArk Software or generate 30.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

CyberArk Software  vs.  DAX Index

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -50510152025
JavaScript chart by amCharts 3.21.15CYB GDAXI
       Timeline  

CyberArk Software and DAX Index Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.17-6.12-4.07-2.020.02.134.336.538.7410.94 0.10.20.30.40.50.6
JavaScript chart by amCharts 3.21.15CYB GDAXI
       Returns  

Pair Trading with CyberArk Software and DAX Index

The main advantage of trading using opposite CyberArk Software and DAX Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CyberArk Software position performs unexpectedly, DAX Index 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 DAX Index will offset losses from the drop in DAX Index's long position.
The idea behind CyberArk Software and DAX Index 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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