Correlation Between Check Point and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both Check Point and Agnico Eagle 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 Agnico Eagle 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 Agnico Eagle Mines, you can compare the effects of market volatilities on Check Point and Agnico Eagle 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 Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Agnico Eagle.
Diversification Opportunities for Check Point and Agnico Eagle
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Check and Agnico is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Agnico Eagle Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agnico Eagle Mines 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 Agnico Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agnico Eagle Mines has no effect on the direction of Check Point i.e., Check Point and Agnico Eagle go up and down completely randomly.
Pair Corralation between Check Point and Agnico Eagle
Assuming the 90 days trading horizon Check Point Software is expected to under-perform the Agnico Eagle. In addition to that, Check Point is 1.52 times more volatile than Agnico Eagle Mines. It trades about -0.12 of its total potential returns per unit of risk. Agnico Eagle Mines is currently generating about 0.01 per unit of volatility. If you would invest 8,060 in Agnico Eagle Mines on August 26, 2024 and sell it today you would earn a total of 14.00 from holding Agnico Eagle Mines or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Check Point Software vs. Agnico Eagle Mines
Performance |
| Timeline |
| Check Point Software |
| Agnico Eagle Mines |
Check Point and Agnico Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Agnico Eagle
The main advantage of trading using opposite Check Point and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Agnico Eagle 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 Agnico Eagle will offset losses from the drop in Agnico Eagle's long position.| Check Point vs. Apple Inc | Check Point vs. Apple Inc | Check Point vs. Apple Inc | Check Point vs. Apple Inc |
| Agnico Eagle vs. MAGIC SOFTWARE ENTR | Agnico Eagle vs. Citic Telecom International | Agnico Eagle vs. Check Point Software | Agnico Eagle vs. Singapore Telecommunications 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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