Correlation Between Rekor Systems and Cerberus Cyber

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

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

Diversification Opportunities for Rekor Systems and Cerberus Cyber

-0.11

Correlation Coefficient

Rekor Systems  Cerberus Cyber

Good diversification

The 3 months correlation between Rekor and Cerberus is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Rekor Systems and Cerberus Cyber Sentinel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cerberus Cyber Sentinel and Rekor Systems 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 Rekor Systems are associated (or correlated) with Cerberus Cyber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cerberus Cyber Sentinel has no effect on the direction of Rekor Systems i.e., Rekor Systems and Cerberus Cyber go up and down completely randomly.

Pair Corralation between Rekor Systems and Cerberus Cyber

Given the investment horizon of 90 days Rekor Systems is expected to generate 1.15 times more return on investment than Cerberus Cyber. However, Rekor Systems is 1.15 times more volatile than Cerberus Cyber Sentinel. It trades about 0.09 of its potential returns per unit of risk. Cerberus Cyber Sentinel is currently generating about -0.1 per unit of risk. If you would invest  82.00  in Rekor Systems on December 20, 2024 and sell it today you would earn a total of  23.00  from holding Rekor Systems or generate 28.05% return on investment over 90 days.

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

Rekor Systems  vs.  Cerberus Cyber Sentinel

Rekor Systems

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rekor Systems are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal forward-looking signals, Rekor Systems reported solid returns over the last few months and may actually be approaching a breakup point.

Cerberus Cyber Sentinel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cerberus Cyber Sentinel 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 basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Rekor Systems and Cerberus Cyber

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

The idea behind Rekor Systems and Cerberus Cyber Sentinel 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.