Correlation Between Check Point and Barclays PLC
Can any of the company-specific risk be diversified away by investing in both Check Point and Barclays 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 Barclays 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 Barclays PLC, you can compare the effects of market volatilities on Check Point and Barclays 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 Barclays PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Barclays PLC.
Diversification Opportunities for Check Point and Barclays PLC
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Check and Barclays is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Barclays PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays 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 Barclays PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays PLC has no effect on the direction of Check Point i.e., Check Point and Barclays PLC go up and down completely randomly.
Pair Corralation between Check Point and Barclays PLC
Assuming the 90 days trading horizon Check Point Software is expected to generate 1.07 times more return on investment than Barclays PLC. However, Check Point is 1.07 times more volatile than Barclays PLC. It trades about 0.18 of its potential returns per unit of risk. Barclays PLC is currently generating about 0.05 per unit of risk. If you would invest 50,796 in Check Point Software on October 11, 2024 and sell it today you would earn a total of 7,108 from holding Check Point Software or generate 13.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.37% |
| Values | Daily Returns |
Check Point Software vs. Barclays PLC
Performance |
| Timeline |
| Check Point Software |
| Barclays PLC |
Check Point and Barclays PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Barclays PLC
The main advantage of trading using opposite Check Point and Barclays PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Barclays 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 Barclays PLC will offset losses from the drop in Barclays PLC's long position.| Check Point vs. Eastman Chemical | Check Point vs. Truist Financial | Check Point vs. LPL Financial Holdings | Check Point vs. Sumitomo Mitsui Financial |
| Barclays PLC vs. Seagate Technology Holdings | Barclays PLC vs. Spotify Technology SA | Barclays PLC vs. Unity Software | Barclays PLC vs. Paycom Software |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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