Correlation Between Check Point and Synthomer Plc
Can any of the company-specific risk be diversified away by investing in both Check Point and Synthomer Plc 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 Synthomer Plc 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 Synthomer plc, you can compare the effects of market volatilities on Check Point and Synthomer Plc 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 Synthomer Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Synthomer Plc.
Diversification Opportunities for Check Point and Synthomer Plc
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Check and Synthomer is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Synthomer plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synthomer plc 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 Synthomer Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synthomer plc has no effect on the direction of Check Point i.e., Check Point and Synthomer Plc go up and down completely randomly.
Pair Corralation between Check Point and Synthomer Plc
Assuming the 90 days trading horizon Check Point Software is expected to generate 0.35 times more return on investment than Synthomer Plc. However, Check Point Software is 2.83 times less risky than Synthomer Plc. It trades about 0.07 of its potential returns per unit of risk. Synthomer plc is currently generating about -0.08 per unit of risk. If you would invest 12,670 in Check Point Software on September 19, 2024 and sell it today you would earn a total of 6,154 from holding Check Point Software or generate 48.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.44% |
| Values | Daily Returns |
Check Point Software vs. Synthomer plc
Performance |
| Timeline |
| Check Point Software |
| Synthomer plc |
Check Point and Synthomer Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Synthomer Plc
The main advantage of trading using opposite Check Point and Synthomer Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Synthomer Plc 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 Synthomer Plc will offset losses from the drop in Synthomer Plc's long position.| Check Point vs. Toyota Motor Corp | Check Point vs. SoftBank Group Corp | Check Point vs. OTP Bank Nyrt | Check Point vs. Hershey Co |
| Synthomer Plc vs. MT Bank Corp | Synthomer Plc vs. Cembra Money Bank | Synthomer Plc vs. National Bank of | Synthomer Plc vs. Norwegian Air Shuttle |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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