Correlation Between Akamai Technologies and CyberArk Software
Can any of the company-specific risk be diversified away by investing in both Akamai Technologies 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 Akamai Technologies and CyberArk Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akamai Technologies and CyberArk Software, you can compare the effects of market volatilities on Akamai Technologies 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 Akamai Technologies with a short position of CyberArk Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akamai Technologies and CyberArk Software.
Diversification Opportunities for Akamai Technologies and CyberArk Software
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Akamai and CyberArk is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Akamai Technologies and CyberArk Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberArk Software and Akamai Technologies 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 Akamai Technologies 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 Akamai Technologies i.e., Akamai Technologies and CyberArk Software go up and down completely randomly.
Pair Corralation between Akamai Technologies and CyberArk Software
Given the investment horizon of 90 days Akamai Technologies is expected to generate 0.72 times more return on investment than CyberArk Software. However, Akamai Technologies is 1.38 times less risky than CyberArk Software. It trades about -0.21 of its potential returns per unit of risk. CyberArk Software is currently generating about -0.17 per unit of risk. If you would invest 11,076 in Akamai Technologies on February 2, 2024 and sell it today you would lose (987.00) from holding Akamai Technologies or give up 8.91% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Akamai Technologies vs. CyberArk Software
Performance |
Timeline |
Akamai Technologies |
CyberArk Software |
Akamai Technologies and CyberArk Software Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Akamai Technologies and CyberArk Software
The main advantage of trading using opposite Akamai Technologies and CyberArk Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akamai Technologies 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.Akamai Technologies vs. Check Point Software | Akamai Technologies vs. VeriSign | Akamai Technologies vs. Qualys Inc | Akamai Technologies vs. F5 Networks |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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