Correlation Between Check Point and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both Check Point and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS, you can compare the effects of market volatilities on Check Point and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and AIR PRODCHEMICALS.
Diversification Opportunities for Check Point and AIR PRODCHEMICALS
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Check and AIR is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of Check Point i.e., Check Point and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between Check Point and AIR PRODCHEMICALS
Assuming the 90 days trading horizon Check Point is expected to generate 1.48 times less return on investment than AIR PRODCHEMICALS. In addition to that, Check Point is 1.45 times more volatile than AIR PRODCHEMICALS. It trades about 0.18 of its total potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about 0.39 per unit of volatility. If you would invest 28,830 in AIR PRODCHEMICALS on August 31, 2024 and sell it today you would earn a total of 2,800 from holding AIR PRODCHEMICALS or generate 9.71% 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. AIR PRODCHEMICALS
Performance |
| Timeline |
| Check Point Software |
| AIR PRODCHEMICALS |
Check Point and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and AIR PRODCHEMICALS
The main advantage of trading using opposite Check Point and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, AIR PRODCHEMICALS 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 AIR PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS's long position.| Check Point vs. CVW CLEANTECH INC | Check Point vs. NorAm Drilling AS | Check Point vs. BORR DRILLING NEW | Check Point vs. Clean Energy Fuels |
| AIR PRODCHEMICALS vs. CapitaLand Investment Limited | AIR PRODCHEMICALS vs. SEI INVESTMENTS | AIR PRODCHEMICALS vs. AUSTEVOLL SEAFOOD | AIR PRODCHEMICALS vs. Gladstone Investment |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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