Correlation Between Check Point and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Check Point and Compagnie Plastic 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 Compagnie Plastic 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 Compagnie Plastic Omnium, you can compare the effects of market volatilities on Check Point and Compagnie Plastic 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 Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Compagnie Plastic.
Diversification Opportunities for Check Point and Compagnie Plastic
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Check and Compagnie is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium 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 Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of Check Point i.e., Check Point and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Check Point and Compagnie Plastic
Assuming the 90 days trading horizon Check Point is expected to generate 1.44 times less return on investment than Compagnie Plastic. But when comparing it to its historical volatility, Check Point Software is 2.3 times less risky than Compagnie Plastic. It trades about 0.19 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about 0.12 of returns per unit of risk over similar time horizon. 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 |
Check Point Software vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Check Point Software |
| Compagnie Plastic Omnium |
Check Point and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Compagnie Plastic
The main advantage of trading using opposite Check Point and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic's long position.| Check Point vs. Extra Space Storage | Check Point vs. Eastinco Mining Exploration | Check Point vs. Teradata Corp | Check Point vs. Southwest Airlines Co |
| Compagnie Plastic vs. Celebrus Technologies plc | Compagnie Plastic vs. Allianz Technology Trust | Compagnie Plastic vs. Futura Medical | Compagnie Plastic vs. Molson Coors Beverage |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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