Correlation Between Advanced Medical and Check Point
Can any of the company-specific risk be diversified away by investing in both Advanced Medical 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 Advanced Medical and Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Medical Solutions and Check Point Software, you can compare the effects of market volatilities on Advanced Medical 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 Advanced Medical with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Medical and Check Point.
Diversification Opportunities for Advanced Medical and Check Point
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Advanced and Check is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions 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 Advanced Medical 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 Advanced Medical Solutions 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 Advanced Medical i.e., Advanced Medical and Check Point go up and down completely randomly.
Pair Corralation between Advanced Medical and Check Point
Assuming the 90 days trading horizon Advanced Medical Solutions is expected to generate 3.29 times more return on investment than Check Point. However, Advanced Medical is 3.29 times more volatile than Check Point Software. It trades about 0.04 of its potential returns per unit of risk. Check Point Software is currently generating about 0.06 per unit of risk. If you would invest 20,850 in Advanced Medical Solutions on August 30, 2024 and sell it today you would earn a total of 400.00 from holding Advanced Medical Solutions or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Medical Solutions vs. Check Point Software
Performance |
| Timeline |
| Advanced Medical Sol |
| Check Point Software |
Advanced Medical and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Medical and Check Point
The main advantage of trading using opposite Advanced Medical and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Medical 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.| Advanced Medical vs. Samsung Electronics Co | Advanced Medical vs. Samsung Electronics Co | Advanced Medical vs. Hyundai Motor | Advanced Medical vs. Toyota Motor Corp |
| Check Point vs. Toyota Motor Corp | Check Point vs. OTP Bank Nyrt | Check Point vs. Cognizant Technology Solutions | Check Point vs. Lendinvest PLC |
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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