Correlation Between Peraso and Cyberlux Corp

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

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

Diversification Opportunities for Peraso and Cyberlux Corp

0.57

Correlation Coefficient

Peraso  Cyberlux Corp

Very weak diversification

The 3 months correlation between Peraso and Cyberlux is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Peraso Inc and Cyberlux Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyberlux Corp and Peraso 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 Peraso Inc are associated (or correlated) with Cyberlux Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyberlux Corp has no effect on the direction of Peraso i.e., Peraso and Cyberlux Corp go up and down completely randomly.

Pair Corralation between Peraso and Cyberlux Corp

Given the investment horizon of 90 days Peraso Inc is expected to generate 1.08 times more return on investment than Cyberlux Corp. However, Peraso is 1.08 times more volatile than Cyberlux Corp. It trades about 0.25 of its potential returns per unit of risk. Cyberlux Corp is currently generating about 0.04 per unit of risk. If you would invest  90.00  in Peraso Inc on October 9, 2024 and sell it today you would earn a total of  49.00  from holding Peraso Inc or generate 54.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Peraso Inc  vs.  Cyberlux Corp

Peraso Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peraso Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Peraso is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Cyberlux Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cyberlux Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, Cyberlux Corp disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Peraso and Cyberlux Corp

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

The idea behind Peraso Inc and Cyberlux Corp 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.