Correlation Between Check Point and SANTANDER
Can any of the company-specific risk be diversified away by investing in both Check Point and SANTANDER 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 SANTANDER 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 SANTANDER UK 8, you can compare the effects of market volatilities on Check Point and SANTANDER 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 SANTANDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and SANTANDER.
Diversification Opportunities for Check Point and SANTANDER
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Check and SANTANDER is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and SANTANDER UK 8 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANTANDER UK 8 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 SANTANDER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANTANDER UK 8 has no effect on the direction of Check Point i.e., Check Point and SANTANDER go up and down completely randomly.
Pair Corralation between Check Point and SANTANDER
Assuming the 90 days trading horizon Check Point Software is expected to generate 1.76 times more return on investment than SANTANDER. However, Check Point is 1.76 times more volatile than SANTANDER UK 8. It trades about 0.08 of its potential returns per unit of risk. SANTANDER UK 8 is currently generating about 0.07 per unit of risk. If you would invest 12,864 in Check Point Software on September 12, 2024 and sell it today you would earn a total of 5,962 from holding Check Point Software or generate 46.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.61% |
| Values | Daily Returns |
Check Point Software vs. SANTANDER UK 8
Performance |
| Timeline |
| Check Point Software |
| SANTANDER UK 8 |
Check Point and SANTANDER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and SANTANDER
The main advantage of trading using opposite Check Point and SANTANDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, SANTANDER 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 SANTANDER will offset losses from the drop in SANTANDER's long position.| Check Point vs. Extra Space Storage | Check Point vs. Eastinco Mining Exploration | Check Point vs. Teradata Corp | Check Point vs. Southwest Airlines Co |
| SANTANDER vs. Vulcan Materials Co | SANTANDER vs. Ryanair Holdings plc | SANTANDER vs. Morgan Advanced Materials | SANTANDER vs. Amedeo Air Four |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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