Correlation Between Check Point and AuthID
Can any of the company-specific risk be diversified away by investing in both Check Point and AuthID 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 AuthID 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 authID Inc, you can compare the effects of market volatilities on Check Point and AuthID 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 AuthID. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and AuthID.
Diversification Opportunities for Check Point and AuthID
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Check and AuthID is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and authID Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on authID Inc 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 AuthID. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of authID Inc has no effect on the direction of Check Point i.e., Check Point and AuthID go up and down completely randomly.
Pair Corralation between Check Point and AuthID
Given the investment horizon of 90 days Check Point is expected to generate 1.21 times less return on investment than AuthID. But when comparing it to its historical volatility, Check Point Software is 3.87 times less risky than AuthID. It trades about 0.08 of its potential returns per unit of risk. authID Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 608.00 in authID Inc on September 4, 2024 and sell it today you would lose (35.00) from holding authID Inc or give up 5.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Check Point Software vs. authID Inc
Performance |
| Timeline |
| Check Point Software |
| authID Inc |
Check Point and AuthID Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and AuthID
The main advantage of trading using opposite Check Point and AuthID positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, AuthID 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 AuthID will offset losses from the drop in AuthID's long position.| Check Point vs. Rapid7 Inc | Check Point vs. Tenable Holdings | Check Point vs. Okta Inc | Check Point vs. WixCom |
| AuthID vs. Datasea | AuthID vs. Priority Technology Holdings | AuthID vs. Fuse Science | AuthID vs. Cerberus Cyber Sentinel |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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