Correlation Between Flywire Corp and CyberArk Software

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

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

Diversification Opportunities for Flywire Corp and CyberArk Software

-0.55

Correlation Coefficient

Flywire Corp  CyberArk Software

Excellent diversification

The 3 months correlation between Flywire and CyberArk is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Flywire Corp and CyberArk Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberArk Software and Flywire Corp 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 Flywire Corp are associated (or correlated) with CyberArk Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberArk Software has no effect on the direction of Flywire Corp i.e., Flywire Corp and CyberArk Software go up and down completely randomly.

Pair Corralation between Flywire Corp and CyberArk Software

Given the investment horizon of 90 days Flywire Corp is expected to under-perform the CyberArk Software. In addition to that, Flywire Corp is 1.31 times more volatile than CyberArk Software. It trades about -0.16 of its total potential returns per unit of risk. CyberArk Software is currently generating about 0.13 per unit of volatility. If you would invest  31,878  in CyberArk Software on November 27, 2024 and sell it today you would earn a total of  5,024  from holding CyberArk Software or generate 15.76% return on investment over 90 days.

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

Flywire Corp  vs.  CyberArk Software

Flywire Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Flywire Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in March 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

CyberArk Software

Risk-Adjusted Performance

Good

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. Even with relatively abnormal fundamental drivers, CyberArk Software reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flywire Corp and CyberArk Software

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

The idea behind Flywire Corp and CyberArk Software 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 CEOs Directory module to screen CEOs from public companies around the world.