Correlation Between Qualys and CyberArk Software

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

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

Diversification Opportunities for Qualys and CyberArk Software

0.46

Correlation Coefficient

Qualys  CyberArk Software

Very weak diversification

The 3 months correlation between Qualys and CyberArk is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Qualys Inc and CyberArk Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberArk Software and Qualys 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 Qualys Inc 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 Qualys i.e., Qualys and CyberArk Software go up and down completely randomly.

Pair Corralation between Qualys and CyberArk Software

Given the investment horizon of 90 days Qualys Inc is expected to under-perform the CyberArk Software. But the stock apears to be less risky and, when comparing its historical volatility, Qualys Inc is 1.47 times less risky than CyberArk Software. The stock trades about -0.07 of its potential returns per unit of risk. The CyberArk Software is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  31,960  in CyberArk Software on December 30, 2024 and sell it today you would earn a total of  1,614  from holding CyberArk Software or generate 5.05% return on investment over 90 days.

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

Qualys Inc  vs.  CyberArk Software

Qualys Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qualys Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

CyberArk Software

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CyberArk Software are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal fundamental drivers, CyberArk Software may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Qualys and CyberArk Software

The main advantage of trading using opposite Qualys and CyberArk Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qualys 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 Qualys Inc 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.

Check out your portfolio center.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.