Correlation Between Scottish Mortgage and Check Point
Can any of the company-specific risk be diversified away by investing in both Scottish Mortgage and Check Point 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 Scottish Mortgage and Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scottish Mortgage Investment and Check Point Software, you can compare the effects of market volatilities on Scottish Mortgage and Check Point 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 Scottish Mortgage with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottish Mortgage and Check Point.
Diversification Opportunities for Scottish Mortgage and Check Point
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Scottish and Check is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Scottish Mortgage Investment and Check Point Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Point Software and Scottish Mortgage 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 Scottish Mortgage Investment are associated (or correlated) with Check Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Point Software has no effect on the direction of Scottish Mortgage i.e., Scottish Mortgage and Check Point go up and down completely randomly.
Pair Corralation between Scottish Mortgage and Check Point
Assuming the 90 days trading horizon Scottish Mortgage is expected to generate 1.26 times less return on investment than Check Point. But when comparing it to its historical volatility, Scottish Mortgage Investment is 1.0 times less risky than Check Point. It trades about 0.05 of its potential returns per unit of risk. Check Point Software is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 11,818 in Check Point Software on October 28, 2024 and sell it today you would earn a total of 6,747 from holding Check Point Software or generate 57.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scottish Mortgage Investment vs. Check Point Software
Performance |
| Timeline |
| Scottish Mortgage |
| Check Point Software |
Scottish Mortgage and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scottish Mortgage and Check Point
The main advantage of trading using opposite Scottish Mortgage and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottish Mortgage position performs unexpectedly, Check Point 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 Check Point will offset losses from the drop in Check Point's long position.| Scottish Mortgage vs. Apple Inc | Scottish Mortgage vs. Apple Inc | Scottish Mortgage vs. Apple Inc | Scottish Mortgage vs. Apple Inc |
| Check Point vs. CARSALESCOM | Check Point vs. Grupo Carso SAB | Check Point vs. ALEFARM BREWING DK 05 | Check Point vs. CarsalesCom |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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