Correlation Between Check Point and Zoom Video
Can any of the company-specific risk be diversified away by investing in both Check Point and Zoom Video 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 Check Point and Zoom Video into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Check Point Software and Zoom Video Communications, you can compare the effects of market volatilities on Check Point and Zoom Video 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 Check Point with a short position of Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Zoom Video.
Diversification Opportunities for Check Point and Zoom Video
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Check and Zoom is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications and Check Point 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 Check Point Software are associated (or correlated) with Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of Check Point i.e., Check Point and Zoom Video go up and down completely randomly.
Pair Corralation between Check Point and Zoom Video
Assuming the 90 days trading horizon Check Point Software is expected to generate 0.65 times more return on investment than Zoom Video. However, Check Point Software is 1.54 times less risky than Zoom Video. It trades about 0.05 of its potential returns per unit of risk. Zoom Video Communications is currently generating about 0.02 per unit of risk. If you would invest 13,354 in Check Point Software on August 25, 2024 and sell it today you would earn a total of 4,696 from holding Check Point Software or generate 35.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.41% |
| Values | Daily Returns |
Check Point Software vs. Zoom Video Communications
Performance |
| Timeline |
| Check Point Software |
| Zoom Video Communications |
Check Point and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Zoom Video
The main advantage of trading using opposite Check Point and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Zoom Video 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 Zoom Video will offset losses from the drop in Zoom Video's long position.| Check Point vs. Toyota Motor Corp | Check Point vs. SoftBank Group Corp | Check Point vs. OTP Bank Nyrt | Check Point vs. Yum Brands |
| Zoom Video vs. Zanaga Iron Ore | Zoom Video vs. Ironveld Plc | Zoom Video vs. JLEN Environmental Assets | Zoom Video vs. Taiwan Semiconductor Manufacturing |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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