Correlation Between Check Point and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Check Point and McEwen Mining 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 McEwen Mining 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 McEwen Mining, you can compare the effects of market volatilities on Check Point and McEwen Mining 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 McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and McEwen Mining.
Diversification Opportunities for Check Point and McEwen Mining
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Check and McEwen is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining 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 McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of Check Point i.e., Check Point and McEwen Mining go up and down completely randomly.
Pair Corralation between Check Point and McEwen Mining
Assuming the 90 days trading horizon Check Point Software is expected to generate 0.63 times more return on investment than McEwen Mining. However, Check Point Software is 1.58 times less risky than McEwen Mining. It trades about 0.27 of its potential returns per unit of risk. McEwen Mining is currently generating about -0.2 per unit of risk. If you would invest 17,042 in Check Point Software on September 3, 2024 and sell it today you would earn a total of 1,174 from holding Check Point Software or generate 6.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Check Point Software vs. McEwen Mining
Performance |
| Timeline |
| Check Point Software |
| McEwen Mining |
Check Point and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and McEwen Mining
The main advantage of trading using opposite Check Point and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, McEwen Mining 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 McEwen Mining will offset losses from the drop in McEwen Mining's long position.| Check Point vs. Toyota Motor Corp | Check Point vs. SoftBank Group Corp | Check Point vs. OTP Bank Nyrt | Check Point vs. Las Vegas Sands |
| McEwen Mining vs. Evolution Gaming Group | McEwen Mining vs. Central Asia Metals | McEwen Mining vs. Blackrock World Mining | McEwen Mining vs. Hochschild Mining plc |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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