Correlation Between Via Renewables and Cerberus Cyber

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

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

Diversification Opportunities for Via Renewables and Cerberus Cyber

0.15

Correlation Coefficient

Via Renewables  Cerberus Cyber

Average diversification

The 3 months correlation between Via and Cerberus is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Via Renewables 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 Via Renewables 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 Via Renewables 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 Via Renewables i.e., Via Renewables and Cerberus Cyber go up and down completely randomly.

Pair Corralation between Via Renewables and Cerberus Cyber

Assuming the 90 days horizon Via Renewables is expected to generate 7.27 times less return on investment than Cerberus Cyber. But when comparing it to its historical volatility, Via Renewables is 14.47 times less risky than Cerberus Cyber. It trades about 0.16 of its potential returns per unit of risk. Cerberus Cyber Sentinel is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  106.00  in Cerberus Cyber Sentinel on November 20, 2024 and sell it today you would earn a total of  20.00  from holding Cerberus Cyber Sentinel or generate 18.87% return on investment over 90 days.

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

Via Renewables  vs.  Cerberus Cyber Sentinel

Via Renewables

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Via Renewables may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Cerberus Cyber Sentinel

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cerberus Cyber Sentinel are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Cerberus Cyber displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Via Renewables and Cerberus Cyber

The main advantage of trading using opposite Via Renewables and Cerberus Cyber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Via Renewables 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 Via Renewables 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.