Correlation Between Compagnie Plastic and Check Point
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and Check Point 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 Compagnie Plastic and Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Plastic Omnium and Check Point Software, you can compare the effects of market volatilities on Compagnie Plastic and Check Point 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 Compagnie Plastic with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Check Point.
Diversification Opportunities for Compagnie Plastic and Check Point
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Compagnie and Check is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and Check Point Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Point Software and Compagnie Plastic 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 Compagnie Plastic Omnium are associated (or correlated) with Check Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Point Software has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and Check Point go up and down completely randomly.
Pair Corralation between Compagnie Plastic and Check Point
Assuming the 90 days trading horizon Compagnie Plastic Omnium is expected to generate 2.3 times more return on investment than Check Point. However, Compagnie Plastic is 2.3 times more volatile than Check Point Software. It trades about 0.12 of its potential returns per unit of risk. Check Point Software is currently generating about 0.19 per unit of risk. If you would invest 923.00 in Compagnie Plastic Omnium on September 12, 2024 and sell it today you would earn a total of 72.00 from holding Compagnie Plastic Omnium or generate 7.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. Check Point Software
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| Check Point Software |
Compagnie Plastic and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and Check Point
The main advantage of trading using opposite Compagnie Plastic and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, Check Point 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 Check Point will offset losses from the drop in Check Point's long position.| Compagnie Plastic vs. Celebrus Technologies plc | Compagnie Plastic vs. Allianz Technology Trust | Compagnie Plastic vs. Futura Medical | Compagnie Plastic vs. Molson Coors Beverage |
| Check Point vs. Extra Space Storage | Check Point vs. Eastinco Mining Exploration | Check Point vs. Teradata Corp | Check Point vs. Southwest Airlines Co |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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