Correlation Between Check Point and GX AI
Can any of the company-specific risk be diversified away by investing in both Check Point and GX AI 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 GX AI 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 GX AI TECH, you can compare the effects of market volatilities on Check Point and GX AI 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 GX AI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and GX AI.
Diversification Opportunities for Check Point and GX AI
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Check and BAIQ39 is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and GX AI TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GX AI TECH 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 GX AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GX AI TECH has no effect on the direction of Check Point i.e., Check Point and GX AI go up and down completely randomly.
Pair Corralation between Check Point and GX AI
Assuming the 90 days trading horizon Check Point Software is expected to generate 0.16 times more return on investment than GX AI. However, Check Point Software is 6.43 times less risky than GX AI. It trades about 0.1 of its potential returns per unit of risk. GX AI TECH is currently generating about 0.0 per unit of risk. If you would invest 57,095 in Check Point Software on October 10, 2024 and sell it today you would earn a total of 809.00 from holding Check Point Software or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Check Point Software vs. GX AI TECH
Performance |
| Timeline |
| Check Point Software |
| GX AI TECH |
Check Point and GX AI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and GX AI
The main advantage of trading using opposite Check Point and GX AI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, GX AI 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 GX AI will offset losses from the drop in GX AI's long position.| Check Point vs. Clover Health Investments, | Check Point vs. Roper Technologies, | Check Point vs. Dell Technologies | Check Point vs. GP Investments |
| GX AI vs. CRISPR Therapeutics AG | GX AI vs. Electronic Arts | GX AI vs. Nordon Indstrias Metalrgicas | GX AI vs. Taiwan Semiconductor Manufacturing |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |