Correlation Between Check Point and Octopus Aim
Can any of the company-specific risk be diversified away by investing in both Check Point and Octopus Aim 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 Octopus Aim 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 Octopus Aim Vct, you can compare the effects of market volatilities on Check Point and Octopus Aim 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 Octopus Aim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Octopus Aim.
Diversification Opportunities for Check Point and Octopus Aim
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Check and Octopus is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Octopus Aim Vct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Octopus Aim Vct 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 Octopus Aim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Octopus Aim Vct has no effect on the direction of Check Point i.e., Check Point and Octopus Aim go up and down completely randomly.
Pair Corralation between Check Point and Octopus Aim
Assuming the 90 days trading horizon Check Point Software is expected to generate 2.32 times more return on investment than Octopus Aim. However, Check Point is 2.32 times more volatile than Octopus Aim Vct. It trades about 0.09 of its potential returns per unit of risk. Octopus Aim Vct is currently generating about -0.04 per unit of risk. If you would invest 14,989 in Check Point Software on December 11, 2024 and sell it today you would earn a total of 7,461 from holding Check Point Software or generate 49.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.71% |
| Values | Daily Returns |
Check Point Software vs. Octopus Aim Vct
Performance |
| Timeline |
| Check Point Software |
| Octopus Aim Vct |
Check Point and Octopus Aim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Octopus Aim
The main advantage of trading using opposite Check Point and Octopus Aim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Octopus Aim 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 Octopus Aim will offset losses from the drop in Octopus Aim's long position.| Check Point vs. Cembra Money Bank | ||
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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