Correlation Between Check Point and Auction Technology
Can any of the company-specific risk be diversified away by investing in both Check Point and Auction Technology 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 Auction Technology 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 Auction Technology Group, you can compare the effects of market volatilities on Check Point and Auction Technology 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 Auction Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Auction Technology.
Diversification Opportunities for Check Point and Auction Technology
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Check and Auction is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction Technology 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 Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of Check Point i.e., Check Point and Auction Technology go up and down completely randomly.
Pair Corralation between Check Point and Auction Technology
Assuming the 90 days trading horizon Check Point Software is expected to generate 1.4 times more return on investment than Auction Technology. However, Check Point is 1.4 times more volatile than Auction Technology Group. It trades about 0.21 of its potential returns per unit of risk. Auction Technology Group is currently generating about -0.26 per unit of risk. If you would invest 21,321 in Check Point Software on December 4, 2024 and sell it today you would earn a total of 1,038 from holding Check Point Software or generate 4.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Check Point Software vs. Auction Technology Group
Performance |
| Timeline |
| Check Point Software |
| Auction Technology |
Check Point and Auction Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Auction Technology
The main advantage of trading using opposite Check Point and Auction Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Auction Technology 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 Auction Technology will offset losses from the drop in Auction Technology's long position.| Check Point vs. Creo Medical Group | Check Point vs. Sparebanken Vest | Check Point vs. Various Eateries PLC | Check Point vs. Erste Group Bank |
| Auction Technology vs. Sovereign Metals | Auction Technology vs. Empire Metals Limited | Auction Technology vs. Power Metal Resources | Auction Technology vs. GreenX Metals |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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