Correlation Between HOCHSCHILD MINING and CyberArk Software

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

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

Diversification Opportunities for HOCHSCHILD MINING and CyberArk Software

0.47

Correlation Coefficient

HOCHSCHILD MINING  CyberArk Software

Very weak diversification

The 3 months correlation between HOCHSCHILD and CyberArk is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding HOCHSCHILD MINING and CyberArk Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberArk Software and HOCHSCHILD MINING 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 HOCHSCHILD MINING 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 HOCHSCHILD MINING i.e., HOCHSCHILD MINING and CyberArk Software go up and down completely randomly.

Pair Corralation between HOCHSCHILD MINING and CyberArk Software

Assuming the 90 days trading horizon HOCHSCHILD MINING is expected to under-perform the CyberArk Software. In addition to that, HOCHSCHILD MINING is 1.1 times more volatile than CyberArk Software. It trades about -0.08 of its total potential returns per unit of risk. CyberArk Software is currently generating about 0.08 per unit of volatility. If you would invest  27,680  in CyberArk Software on September 22, 2024 and sell it today you would earn a total of  2,300  from holding CyberArk Software or generate 8.31% return on investment over 90 days.

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

HOCHSCHILD MINING  vs.  CyberArk Software

HOCHSCHILD MINING

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HOCHSCHILD MINING are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain primary indicators, HOCHSCHILD MINING exhibited solid returns over the last few months and may actually be approaching a breakup point.

CyberArk Software

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CyberArk Software are ranked lower than 8 (%) 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.

Pair Trading with HOCHSCHILD MINING and CyberArk Software

The main advantage of trading using opposite HOCHSCHILD MINING and CyberArk Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOCHSCHILD MINING 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 HOCHSCHILD MINING 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.