Correlation Between Cloudflare and Advanced Enzyme

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

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

Diversification Opportunities for Cloudflare and Advanced Enzyme

0.29

Correlation Coefficient

Cloudflare  Advanced Enzyme

Modest diversification

The 3 months correlation between Cloudflare and Advanced is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Cloudflare and Advanced Enzyme Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Enzyme Tech and Cloudflare 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 Cloudflare are associated (or correlated) with Advanced Enzyme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Enzyme Tech has no effect on the direction of Cloudflare i.e., Cloudflare and Advanced Enzyme go up and down completely randomly.

Pair Corralation between Cloudflare and Advanced Enzyme

Considering the 90-day investment horizon Cloudflare is expected to generate 0.92 times more return on investment than Advanced Enzyme. However, Cloudflare is 1.08 times less risky than Advanced Enzyme. It trades about 0.19 of its potential returns per unit of risk. Advanced Enzyme Technologies is currently generating about 0.04 per unit of risk. If you would invest  15,752  in Cloudflare on May 18, 2025 and sell it today you would earn a total of  4,339  from holding Cloudflare or generate 27.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.38%
Values	Daily Returns

Cloudflare  vs.  Advanced Enzyme Technologies

Cloudflare

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cloudflare are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Cloudflare unveiled solid returns over the last few months and may actually be approaching a breakup point.

Advanced Enzyme Tech

Risk-Adjusted Performance

Soft

Over the last 90 days Advanced Enzyme Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak primary indicators, Advanced Enzyme may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Cloudflare and Advanced Enzyme

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

The idea behind Cloudflare and Advanced Enzyme Technologies 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 CEOs Directory module to screen CEOs from public companies around the world.