Correlation Between Central Asia and Check Point
Can any of the company-specific risk be diversified away by investing in both Central Asia 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 Central Asia and Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Asia Metals and Check Point Software, you can compare the effects of market volatilities on Central Asia 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 Central Asia with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Asia and Check Point.
Diversification Opportunities for Central Asia and Check Point
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Central and Check is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Central Asia Metals 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 Central Asia 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 Central Asia Metals 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 Central Asia i.e., Central Asia and Check Point go up and down completely randomly.
Pair Corralation between Central Asia and Check Point
Assuming the 90 days trading horizon Central Asia Metals is expected to under-perform the Check Point. In addition to that, Central Asia is 1.3 times more volatile than Check Point Software. It trades about -0.01 of its total potential returns per unit of risk. Check Point Software is currently generating about 0.06 per unit of volatility. If you would invest 13,135 in Check Point Software on August 30, 2024 and sell it today you would earn a total of 5,044 from holding Check Point Software or generate 38.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.97% |
| Values | Daily Returns |
Central Asia Metals vs. Check Point Software
Performance |
| Timeline |
| Central Asia Metals |
| Check Point Software |
Central Asia and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Asia and Check Point
The main advantage of trading using opposite Central Asia and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Asia 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.| Central Asia vs. bet at home AG | Central Asia vs. Pets at Home | Central Asia vs. LBG Media PLC | Central Asia vs. Advanced Medical Solutions |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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