Correlation Between Check Point and Tenable Holdings
Can any of the company-specific risk be diversified away by investing in both Check Point and Tenable Holdings 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 Tenable Holdings 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 Tenable Holdings, you can compare the effects of market volatilities on Check Point and Tenable Holdings 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 Tenable Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Tenable Holdings.
Diversification Opportunities for Check Point and Tenable Holdings
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Check and Tenable is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Tenable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenable Holdings 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 Tenable Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenable Holdings has no effect on the direction of Check Point i.e., Check Point and Tenable Holdings go up and down completely randomly.
Pair Corralation between Check Point and Tenable Holdings
Given the investment horizon of 90 days Check Point Software is expected to under-perform the Tenable Holdings. In addition to that, Check Point is 1.33 times more volatile than Tenable Holdings. It trades about -0.04 of its total potential returns per unit of risk. Tenable Holdings is currently generating about 0.09 per unit of volatility. If you would invest 3,970 in Tenable Holdings on August 26, 2024 and sell it today you would earn a total of 274.00 from holding Tenable Holdings or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Check Point Software vs. Tenable Holdings
Performance |
| Timeline |
| Check Point Software |
| Tenable Holdings |
Check Point and Tenable Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Tenable Holdings
The main advantage of trading using opposite Check Point and Tenable Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Tenable Holdings 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 Tenable Holdings will offset losses from the drop in Tenable Holdings' long position.| Check Point vs. GigaCloud Technology Class | Check Point vs. Arqit Quantum | Check Point vs. Cemtrex | Check Point vs. Rapid7 Inc |
| Tenable Holdings vs. GigaCloud Technology Class | Tenable Holdings vs. Arqit Quantum | Tenable Holdings vs. Cemtrex | Tenable Holdings vs. Rapid7 Inc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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