Correlation Between MicroAlgo and CyberArk Software

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

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

Diversification Opportunities for MicroAlgo and CyberArk Software

-0.62

Correlation Coefficient

MicroAlgo  CyberArk Software

Excellent diversification

The 3 months correlation between MicroAlgo and CyberArk is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding MicroAlgo and CyberArk Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberArk Software and MicroAlgo 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 MicroAlgo 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 MicroAlgo i.e., MicroAlgo and CyberArk Software go up and down completely randomly.

Pair Corralation between MicroAlgo and CyberArk Software

Given the investment horizon of 90 days MicroAlgo is expected to generate 2.73 times less return on investment than CyberArk Software. In addition to that, MicroAlgo is 9.01 times more volatile than CyberArk Software. It trades about 0.01 of its total potential returns per unit of risk. CyberArk Software is currently generating about 0.2 per unit of volatility. If you would invest  32,000  in CyberArk Software on October 9, 2024 and sell it today you would earn a total of  2,592  from holding CyberArk Software or generate 8.1% return on investment over 90 days.

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

MicroAlgo  vs.  CyberArk Software

MicroAlgo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MicroAlgo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

CyberArk Software

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CyberArk Software are ranked lower than 12 (%) 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 MicroAlgo and CyberArk Software

The main advantage of trading using opposite MicroAlgo and CyberArk Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroAlgo 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 MicroAlgo 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.