Correlation Between Check Point and Investment
Can any of the company-specific risk be diversified away by investing in both Check Point and Investment 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 Investment 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 The Investment, you can compare the effects of market volatilities on Check Point and Investment 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Investment.
Diversification Opportunities for Check Point and Investment
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Check and Investment is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and The Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment has no effect on the direction of Check Point i.e., Check Point and Investment go up and down completely randomly.
Pair Corralation between Check Point and Investment
Assuming the 90 days trading horizon Check Point Software is expected to generate 1.65 times more return on investment than Investment. However, Check Point is 1.65 times more volatile than The Investment. It trades about 0.08 of its potential returns per unit of risk. The Investment is currently generating about 0.05 per unit of risk. If you would invest 12,172 in Check Point Software on August 30, 2024 and sell it today you would earn a total of 6,007 from holding Check Point Software or generate 49.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.48% |
| Values | Daily Returns |
Check Point Software vs. The Investment
Performance |
| Timeline |
| Check Point Software |
| Investment |
Check Point and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Investment
The main advantage of trading using opposite Check Point and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment's long position.| Check Point vs. Toyota Motor Corp | Check Point vs. OTP Bank Nyrt | Check Point vs. Cognizant Technology Solutions | Check Point vs. Lendinvest PLC |
| Investment vs. Lendinvest PLC | Investment vs. Neometals | Investment vs. Albion Technology General | Investment vs. Jupiter Fund Management |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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