Correlation Between Check Point and Symphony Environmental
Can any of the company-specific risk be diversified away by investing in both Check Point and Symphony Environmental 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 Symphony Environmental 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 Symphony Environmental Technologies, you can compare the effects of market volatilities on Check Point and Symphony Environmental 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 Symphony Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Symphony Environmental.
Diversification Opportunities for Check Point and Symphony Environmental
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Check and Symphony is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Symphony Environmental Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symphony Environmental 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 Symphony Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symphony Environmental has no effect on the direction of Check Point i.e., Check Point and Symphony Environmental go up and down completely randomly.
Pair Corralation between Check Point and Symphony Environmental
Assuming the 90 days trading horizon Check Point is expected to generate 1.18 times less return on investment than Symphony Environmental. But when comparing it to its historical volatility, Check Point Software is 1.02 times less risky than Symphony Environmental. It trades about 0.33 of its potential returns per unit of risk. Symphony Environmental Technologies is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 290.00 in Symphony Environmental Technologies on November 1, 2024 and sell it today you would earn a total of 35.00 from holding Symphony Environmental Technologies or generate 12.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Check Point Software vs. Symphony Environmental Technol
Performance |
| Timeline |
| Check Point Software |
| Symphony Environmental |
Check Point and Symphony Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Symphony Environmental
The main advantage of trading using opposite Check Point and Symphony Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Symphony Environmental 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 Symphony Environmental will offset losses from the drop in Symphony Environmental's long position.| Check Point vs. Toyota Motor Corp | Check Point vs. SoftBank Group Corp | Check Point vs. OTP Bank Nyrt | Check Point vs. Agilent Technologies |
| Symphony Environmental vs. Albion Technology General | Symphony Environmental vs. Sabien Technology Group | Symphony Environmental vs. Check Point Software | Symphony Environmental vs. Wizz Air Holdings |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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