Correlation Between Check Point and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both Check Point and WIMFARM SA 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 WIMFARM SA 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 WIMFARM SA EO, you can compare the effects of market volatilities on Check Point and WIMFARM SA 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 WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and WIMFARM SA.
Diversification Opportunities for Check Point and WIMFARM SA
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Check and WIMFARM is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO 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 WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of Check Point i.e., Check Point and WIMFARM SA go up and down completely randomly.
Pair Corralation between Check Point and WIMFARM SA
Assuming the 90 days trading horizon Check Point Software is expected to generate 0.41 times more return on investment than WIMFARM SA. However, Check Point Software is 2.46 times less risky than WIMFARM SA. It trades about 0.08 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about -0.08 per unit of risk. If you would invest 11,986 in Check Point Software on November 27, 2024 and sell it today you would earn a total of 8,654 from holding Check Point Software or generate 72.2% 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. WIMFARM SA EO
Performance |
| Timeline |
| Check Point Software |
| WIMFARM SA EO |
Check Point and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and WIMFARM SA
The main advantage of trading using opposite Check Point and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.| Check Point vs. COMMERCIAL VEHICLE | Check Point vs. Playtech plc | Check Point vs. Genscript Biotech | Check Point vs. GRUPO CARSO A1 |
| WIMFARM SA vs. CITY OFFICE REIT | WIMFARM SA vs. alstria office REIT AG | WIMFARM SA vs. Focus Home Interactive | WIMFARM SA vs. OFFICE DEPOT |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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