Correlation Between Check Point and Prosiebensat
Can any of the company-specific risk be diversified away by investing in both Check Point and Prosiebensat 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 Prosiebensat 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 Prosiebensat 1 Media, you can compare the effects of market volatilities on Check Point and Prosiebensat 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 Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Prosiebensat.
Diversification Opportunities for Check Point and Prosiebensat
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Check and Prosiebensat is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Prosiebensat 1 Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosiebensat 1 Media 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 Prosiebensat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosiebensat 1 Media has no effect on the direction of Check Point i.e., Check Point and Prosiebensat go up and down completely randomly.
Pair Corralation between Check Point and Prosiebensat
Assuming the 90 days trading horizon Check Point Software is expected to generate 0.53 times more return on investment than Prosiebensat. However, Check Point Software is 1.9 times less risky than Prosiebensat. It trades about 0.07 of its potential returns per unit of risk. Prosiebensat 1 Media is currently generating about -0.01 per unit of risk. If you would invest 12,610 in Check Point Software on September 13, 2024 and sell it today you would earn a total of 6,174 from holding Check Point Software or generate 48.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.77% |
| Values | Daily Returns |
Check Point Software vs. Prosiebensat 1 Media
Performance |
| Timeline |
| Check Point Software |
| Prosiebensat 1 Media |
Check Point and Prosiebensat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Prosiebensat
The main advantage of trading using opposite Check Point and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Prosiebensat 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 Prosiebensat will offset losses from the drop in Prosiebensat's long position.| Check Point vs. Toyota Motor Corp | Check Point vs. SoftBank Group Corp | Check Point vs. OTP Bank Nyrt | Check Point vs. Hershey Co |
| Prosiebensat vs. Bytes Technology | Prosiebensat vs. Check Point Software | Prosiebensat vs. Polar Capital Technology | Prosiebensat vs. STMicroelectronics NV |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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