Correlation Between Check Point and Alfa Financial
Can any of the company-specific risk be diversified away by investing in both Check Point and Alfa Financial 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 Alfa Financial 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 Alfa Financial Software, you can compare the effects of market volatilities on Check Point and Alfa Financial 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 Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Alfa Financial.
Diversification Opportunities for Check Point and Alfa Financial
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Check and Alfa is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software 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 Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of Check Point i.e., Check Point and Alfa Financial go up and down completely randomly.
Pair Corralation between Check Point and Alfa Financial
Assuming the 90 days trading horizon Check Point is expected to generate 1.57 times less return on investment than Alfa Financial. But when comparing it to its historical volatility, Check Point Software is 1.5 times less risky than Alfa Financial. It trades about 0.05 of its potential returns per unit of risk. Alfa Financial Software is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 169.00 in Alfa Financial Software on August 24, 2024 and sell it today you would earn a total of 99.00 from holding Alfa Financial Software or generate 58.58% 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. Alfa Financial Software
Performance |
| Timeline |
| Check Point Software |
| Alfa Financial Software |
Check Point and Alfa Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Alfa Financial
The main advantage of trading using opposite Check Point and Alfa Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Alfa Financial 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 Alfa Financial will offset losses from the drop in Alfa Financial's long position.| Check Point vs. Clean Energy Fuels | Check Point vs. InterContinental Hotels Group | Check Point vs. Regal Hotels International | Check Point vs. ALERION CLEANPOWER |
| Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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