Correlation Between Check Point and TBC Bank
Can any of the company-specific risk be diversified away by investing in both Check Point and TBC Bank 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 TBC Bank 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 TBC Bank Group, you can compare the effects of market volatilities on Check Point and TBC Bank 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 TBC Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and TBC Bank.
Diversification Opportunities for Check Point and TBC Bank
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Check and TBC is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and TBC Bank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TBC Bank Group 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 TBC Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TBC Bank Group has no effect on the direction of Check Point i.e., Check Point and TBC Bank go up and down completely randomly.
Pair Corralation between Check Point and TBC Bank
Assuming the 90 days trading horizon Check Point is expected to generate 1.38 times less return on investment than TBC Bank. But when comparing it to its historical volatility, Check Point Software is 1.48 times less risky than TBC Bank. It trades about 0.07 of its potential returns per unit of risk. TBC Bank Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 190,678 in TBC Bank Group on October 29, 2024 and sell it today you would earn a total of 129,322 from holding TBC Bank Group or generate 67.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.14% |
| Values | Daily Returns |
Check Point Software vs. TBC Bank Group
Performance |
| Timeline |
| Check Point Software |
| TBC Bank Group |
Check Point and TBC Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and TBC Bank
The main advantage of trading using opposite Check Point and TBC Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, TBC Bank 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 TBC Bank will offset losses from the drop in TBC Bank'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 |
| TBC Bank vs. Waste Management | TBC Bank vs. Martin Marietta Materials | TBC Bank vs. Ecclesiastical Insurance Office | TBC Bank vs. Summit Materials Cl |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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