Correlation Between Check Point and Spectra Systems
Can any of the company-specific risk be diversified away by investing in both Check Point and Spectra Systems 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 Spectra Systems 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 Spectra Systems Corp, you can compare the effects of market volatilities on Check Point and Spectra Systems 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 Spectra Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Spectra Systems.
Diversification Opportunities for Check Point and Spectra Systems
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Check and Spectra is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Spectra Systems Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectra Systems Corp 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 Spectra Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectra Systems Corp has no effect on the direction of Check Point i.e., Check Point and Spectra Systems go up and down completely randomly.
Pair Corralation between Check Point and Spectra Systems
Assuming the 90 days trading horizon Check Point Software is expected to under-perform the Spectra Systems. In addition to that, Check Point is 1.29 times more volatile than Spectra Systems Corp. It trades about -0.17 of its total potential returns per unit of risk. Spectra Systems Corp is currently generating about 0.01 per unit of volatility. If you would invest 25,300 in Spectra Systems Corp on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Spectra Systems Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Check Point Software vs. Spectra Systems Corp
Performance |
| Timeline |
| Check Point Software |
| Spectra Systems Corp |
Check Point and Spectra Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Spectra Systems
The main advantage of trading using opposite Check Point and Spectra Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Spectra Systems 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 Spectra Systems will offset losses from the drop in Spectra Systems' long position.| Check Point vs. Toyota Motor Corp | Check Point vs. SoftBank Group Corp | Check Point vs. OTP Bank Nyrt | Check Point vs. Yum Brands |
| Spectra Systems vs. Eastinco Mining Exploration | Spectra Systems vs. Made Tech Group | Spectra Systems vs. Check Point Software | Spectra Systems vs. Accsys Technologies 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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