Correlation Between Check Point and NRG Energy,
Can any of the company-specific risk be diversified away by investing in both Check Point and NRG Energy, 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 NRG Energy, 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 NRG Energy,, you can compare the effects of market volatilities on Check Point and NRG Energy, 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 NRG Energy,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and NRG Energy,.
Diversification Opportunities for Check Point and NRG Energy,
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Check and NRG is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and NRG Energy, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NRG Energy, 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 NRG Energy,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NRG Energy, has no effect on the direction of Check Point i.e., Check Point and NRG Energy, go up and down completely randomly.
Pair Corralation between Check Point and NRG Energy,
Assuming the 90 days trading horizon Check Point is expected to generate 2.39 times less return on investment than NRG Energy,. But when comparing it to its historical volatility, Check Point Software is 1.43 times less risky than NRG Energy,. It trades about 0.09 of its potential returns per unit of risk. NRG Energy, is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 15,293 in NRG Energy, on October 13, 2024 and sell it today you would earn a total of 43,207 from holding NRG Energy, or generate 282.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Check Point Software vs. NRG Energy,
Performance |
| Timeline |
| Check Point Software |
| NRG Energy, |
Check Point and NRG Energy, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and NRG Energy,
The main advantage of trading using opposite Check Point and NRG Energy, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, NRG Energy, 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 NRG Energy, will offset losses from the drop in NRG Energy,'s long position.| Check Point vs. Delta Air Lines | Check Point vs. Charter Communications | Check Point vs. Marfrig Global Foods | Check Point vs. Pentair plc |
| NRG Energy, vs. DXC Technology | NRG Energy, vs. Spotify Technology SA | NRG Energy, vs. Check Point Software | NRG Energy, vs. TechnipFMC 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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