Correlation Between Check Point and Aptitude Software
Can any of the company-specific risk be diversified away by investing in both Check Point and Aptitude Software 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 Aptitude Software 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 Aptitude Software Group, you can compare the effects of market volatilities on Check Point and Aptitude Software 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 Aptitude Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Aptitude Software.
Diversification Opportunities for Check Point and Aptitude Software
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Check and Aptitude is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Aptitude Software Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptitude Software 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 Aptitude Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptitude Software has no effect on the direction of Check Point i.e., Check Point and Aptitude Software go up and down completely randomly.
Pair Corralation between Check Point and Aptitude Software
Assuming the 90 days trading horizon Check Point Software is expected to generate 0.83 times more return on investment than Aptitude Software. However, Check Point Software is 1.2 times less risky than Aptitude Software. It trades about 0.59 of its potential returns per unit of risk. Aptitude Software Group is currently generating about 0.02 per unit of risk. If you would invest 17,948 in Check Point Software on November 6, 2024 and sell it today you would earn a total of 3,895 from holding Check Point Software or generate 21.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Check Point Software vs. Aptitude Software Group
Performance |
| Timeline |
| Check Point Software |
| Aptitude Software |
Check Point and Aptitude Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Aptitude Software
The main advantage of trading using opposite Check Point and Aptitude Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Aptitude Software 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 Aptitude Software will offset losses from the drop in Aptitude Software's long position.| Check Point vs. Centaur Media | Check Point vs. LBG Media PLC | Check Point vs. Air Products Chemicals | Check Point vs. Intermediate Capital Group |
| Aptitude Software vs. Ion Beam Applications | Aptitude Software vs. Alaska Air Group | Aptitude Software vs. CAP LEASE AVIATION | Aptitude Software vs. Fair Oaks Income |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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