Correlation Between Check Point and CVR Energy
Can any of the company-specific risk be diversified away by investing in both Check Point and CVR Energy 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 CVR Energy 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 CVR Energy, you can compare the effects of market volatilities on Check Point and CVR Energy 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 CVR Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and CVR Energy.
Diversification Opportunities for Check Point and CVR Energy
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Check and CVR is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and CVR Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVR Energy 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 CVR Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVR Energy has no effect on the direction of Check Point i.e., Check Point and CVR Energy go up and down completely randomly.
Pair Corralation between Check Point and CVR Energy
Assuming the 90 days trading horizon Check Point is expected to generate 3.92 times less return on investment than CVR Energy. But when comparing it to its historical volatility, Check Point Software is 3.11 times less risky than CVR Energy. It trades about 0.18 of its potential returns per unit of risk. CVR Energy is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,624 in CVR Energy on September 1, 2024 and sell it today you would earn a total of 322.00 from holding CVR Energy or generate 19.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Check Point Software vs. CVR Energy
Performance |
| Timeline |
| Check Point Software |
| CVR Energy |
Check Point and CVR Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and CVR Energy
The main advantage of trading using opposite Check Point and CVR Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, CVR Energy 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 CVR Energy will offset losses from the drop in CVR Energy's long position.| Check Point vs. Bank of Ireland | Check Point vs. AMG Advanced Metallurgical | Check Point vs. Regions Financial Corp | Check Point vs. Hochschild Mining plc |
| CVR Energy vs. Fevertree Drinks Plc | CVR Energy vs. National Beverage Corp | CVR Energy vs. Charter Communications Cl | CVR Energy vs. Supermarket Income REIT |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |