Correlation Between Check Point and Teladoc Health
Can any of the company-specific risk be diversified away by investing in both Check Point and Teladoc Health 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 Teladoc Health 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 Teladoc Health, you can compare the effects of market volatilities on Check Point and Teladoc Health 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 Teladoc Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Teladoc Health.
Diversification Opportunities for Check Point and Teladoc Health
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Check and Teladoc is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Teladoc Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc Health 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 Teladoc Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teladoc Health has no effect on the direction of Check Point i.e., Check Point and Teladoc Health go up and down completely randomly.
Pair Corralation between Check Point and Teladoc Health
Assuming the 90 days trading horizon Check Point Software is expected to generate 0.32 times more return on investment than Teladoc Health. However, Check Point Software is 3.12 times less risky than Teladoc Health. It trades about 0.09 of its potential returns per unit of risk. Teladoc Health is currently generating about -0.02 per unit of risk. If you would invest 33,220 in Check Point Software on October 14, 2024 and sell it today you would earn a total of 24,684 from holding Check Point Software or generate 74.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Check Point Software vs. Teladoc Health
Performance |
| Timeline |
| Check Point Software |
| Teladoc Health |
Check Point and Teladoc Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Teladoc Health
The main advantage of trading using opposite Check Point and Teladoc Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Teladoc Health 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 Teladoc Health will offset losses from the drop in Teladoc Health'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 |
| Teladoc Health vs. Ross Stores | Teladoc Health vs. Check Point Software | Teladoc Health vs. British American Tobacco | Teladoc Health vs. United Natural Foods, |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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