Correlation Between Akamai Technologies and Check Point
Can any of the company-specific risk be diversified away by investing in both Akamai Technologies 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 Akamai Technologies and Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akamai Technologies and Check Point Software, you can compare the effects of market volatilities on Akamai Technologies 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 Akamai Technologies with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akamai Technologies and Check Point.
Diversification Opportunities for Akamai Technologies and Check Point
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Akamai and Check is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Akamai Technologies 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 Akamai Technologies 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 Akamai Technologies 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 Akamai Technologies i.e., Akamai Technologies and Check Point go up and down completely randomly.
Pair Corralation between Akamai Technologies and Check Point
Given the investment horizon of 90 days Akamai Technologies is expected to under-perform the Check Point. In addition to that, Akamai Technologies is 1.57 times more volatile than Check Point Software. It trades about -0.13 of its total potential returns per unit of risk. Check Point Software is currently generating about 0.03 per unit of volatility. If you would invest 18,701 in Check Point Software on October 20, 2024 and sell it today you would earn a total of 86.00 from holding Check Point Software or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akamai Technologies vs. Check Point Software
Performance |
| Timeline |
| Akamai Technologies |
| Check Point Software |
Akamai Technologies and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akamai Technologies and Check Point
The main advantage of trading using opposite Akamai Technologies and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akamai Technologies 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.| Akamai Technologies vs. Check Point Software | Akamai Technologies vs. VeriSign | Akamai Technologies vs. Qualys Inc | Akamai Technologies vs. F5 Networks |
| Check Point vs. Rapid7 Inc | Check Point vs. Tenable Holdings | Check Point vs. Okta Inc | Check Point vs. WixCom |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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