Correlation Between Check Point and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both Check Point and Hollywood Bowl 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 Hollywood Bowl 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 Hollywood Bowl Group, you can compare the effects of market volatilities on Check Point and Hollywood Bowl 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 Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Hollywood Bowl.
Diversification Opportunities for Check Point and Hollywood Bowl
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Check and Hollywood is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group 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 Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of Check Point i.e., Check Point and Hollywood Bowl go up and down completely randomly.
Pair Corralation between Check Point and Hollywood Bowl
Assuming the 90 days trading horizon Check Point Software is expected to generate 1.06 times more return on investment than Hollywood Bowl. However, Check Point is 1.06 times more volatile than Hollywood Bowl Group. It trades about 0.09 of its potential returns per unit of risk. Hollywood Bowl Group is currently generating about -0.04 per unit of risk. If you would invest 16,549 in Check Point Software on December 8, 2024 and sell it today you would earn a total of 6,306 from holding Check Point Software or generate 38.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.4% |
| Values | Daily Returns |
Check Point Software vs. Hollywood Bowl Group
Performance |
| Timeline |
| Check Point Software |
| Hollywood Bowl Group |
Check Point and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Hollywood Bowl
The main advantage of trading using opposite Check Point and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Hollywood Bowl 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 Hollywood Bowl will offset losses from the drop in Hollywood Bowl's long position.| Check Point vs. Systemair AB | Check Point vs. Delta Air Lines | Check Point vs. JB Hunt Transport | Check Point vs. Coor Service Management |
| Hollywood Bowl vs. Software Circle plc | Hollywood Bowl vs. Universal Health Services | Hollywood Bowl vs. Check Point Software | Hollywood Bowl vs. MyHealthChecked Plc |
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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