Correlation Between Check Point and BH Macro
Can any of the company-specific risk be diversified away by investing in both Check Point and BH Macro 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 BH Macro 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 BH Macro Limited, you can compare the effects of market volatilities on Check Point and BH Macro 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 BH Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and BH Macro.
Diversification Opportunities for Check Point and BH Macro
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Check and BHMU is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and BH Macro Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BH Macro Limited 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 BH Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BH Macro Limited has no effect on the direction of Check Point i.e., Check Point and BH Macro go up and down completely randomly.
Pair Corralation between Check Point and BH Macro
Assuming the 90 days trading horizon Check Point Software is expected to generate 1.04 times more return on investment than BH Macro. However, Check Point is 1.04 times more volatile than BH Macro Limited. It trades about 0.07 of its potential returns per unit of risk. BH Macro Limited 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 Against |
| Strength | Insignificant |
| Accuracy | 94.77% |
| Values | Daily Returns |
Check Point Software vs. BH Macro Limited
Performance |
| Timeline |
| Check Point Software |
| BH Macro Limited |
Check Point and BH Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and BH Macro
The main advantage of trading using opposite Check Point and BH Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, BH Macro 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 BH Macro will offset losses from the drop in BH Macro'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 |
| BH Macro vs. Iron Mountain | BH Macro vs. Check Point Software | BH Macro vs. Baker Steel Resources | BH Macro vs. Spotify Technology SA |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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