Correlation Between Check Point and Mosaic
Can any of the company-specific risk be diversified away by investing in both Check Point and Mosaic 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 Mosaic 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 The Mosaic, you can compare the effects of market volatilities on Check Point and Mosaic 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 Mosaic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Mosaic.
Diversification Opportunities for Check Point and Mosaic
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Check and Mosaic is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and The Mosaic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mosaic 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 Mosaic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mosaic has no effect on the direction of Check Point i.e., Check Point and Mosaic go up and down completely randomly.
Pair Corralation between Check Point and Mosaic
Assuming the 90 days trading horizon Check Point Software is expected to generate 0.66 times more return on investment than Mosaic. However, Check Point Software is 1.52 times less risky than Mosaic. It trades about 0.08 of its potential returns per unit of risk. The Mosaic is currently generating about -0.01 per unit of risk. If you would invest 11,435 in Check Point Software on September 4, 2024 and sell it today you would earn a total of 5,995 from holding Check Point Software or generate 52.43% 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. The Mosaic
Performance |
| Timeline |
| Check Point Software |
| Mosaic |
Check Point and Mosaic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Mosaic
The main advantage of trading using opposite Check Point and Mosaic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Mosaic 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 Mosaic will offset losses from the drop in Mosaic's long position.| Check Point vs. TOTAL GABON | Check Point vs. Walgreens Boots Alliance | Check Point vs. Peak Resources Limited |
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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