Correlation Between Check Point and Yext
Can any of the company-specific risk be diversified away by investing in both Check Point and Yext 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 Yext 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 Yext Inc, you can compare the effects of market volatilities on Check Point and Yext 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 Yext. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Yext.
Diversification Opportunities for Check Point and Yext
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Check and Yext is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Yext Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yext 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 Yext. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yext Inc has no effect on the direction of Check Point i.e., Check Point and Yext go up and down completely randomly.
Pair Corralation between Check Point and Yext
Given the investment horizon of 90 days Check Point is expected to generate 1.57 times less return on investment than Yext. But when comparing it to its historical volatility, Check Point Software is 2.58 times less risky than Yext. It trades about 0.05 of its potential returns per unit of risk. Yext Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 645.00 in Yext Inc on September 3, 2024 and sell it today you would earn a total of 181.00 from holding Yext Inc or generate 28.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Check Point Software vs. Yext Inc
Performance |
| Timeline |
| Check Point Software |
| Yext Inc |
Check Point and Yext Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Yext
The main advantage of trading using opposite Check Point and Yext positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Yext 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 Yext will offset losses from the drop in Yext's long position.| Check Point vs. Rapid7 Inc | Check Point vs. Tenable Holdings | Check Point vs. Okta Inc | Check Point vs. WixCom |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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