Correlation Between CyberArk Software and Grand Canyon

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

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

Diversification Opportunities for CyberArk Software and Grand Canyon

0.89

Correlation Coefficient

CyberArk Software  Grand Canyon

Very poor diversification

The 3 months correlation between CyberArk and Grand is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding CyberArk Software and Grand Canyon Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Canyon Education 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 Grand Canyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Canyon Education has no effect on the direction of CyberArk Software i.e., CyberArk Software and Grand Canyon go up and down completely randomly.

Pair Corralation between CyberArk Software and Grand Canyon

Assuming the 90 days trading horizon CyberArk Software is expected to generate 1.83 times more return on investment than Grand Canyon. However, CyberArk Software is 1.83 times more volatile than Grand Canyon Education. It trades about 0.03 of its potential returns per unit of risk. Grand Canyon Education is currently generating about 0.0 per unit of risk. If you would invest  31,120  in CyberArk Software on December 24, 2024 and sell it today you would earn a total of  820.00  from holding CyberArk Software or generate 2.63% return on investment over 90 days.

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

CyberArk Software  vs.  Grand Canyon Education

CyberArk Software

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CyberArk Software are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, CyberArk Software is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Grand Canyon Education

Risk-Adjusted Performance

Weak

Over the last 90 days Grand Canyon Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Grand Canyon is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CyberArk Software and Grand Canyon

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

The idea behind CyberArk Software and Grand Canyon Education 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.