Correlation Between Check Point and Citic Telecom
Can any of the company-specific risk be diversified away by investing in both Check Point and Citic Telecom 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 Citic Telecom 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 Citic Telecom International, you can compare the effects of market volatilities on Check Point and Citic Telecom 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 Citic Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Citic Telecom.
Diversification Opportunities for Check Point and Citic Telecom
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Check and Citic is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Citic Telecom International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citic Telecom Intern 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 Citic Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citic Telecom Intern has no effect on the direction of Check Point i.e., Check Point and Citic Telecom go up and down completely randomly.
Pair Corralation between Check Point and Citic Telecom
Assuming the 90 days trading horizon Check Point Software is expected to generate 0.52 times more return on investment than Citic Telecom. However, Check Point Software is 1.93 times less risky than Citic Telecom. It trades about 0.08 of its potential returns per unit of risk. Citic Telecom International is currently generating about 0.03 per unit of risk. If you would invest 11,710 in Check Point Software on November 19, 2024 and sell it today you would earn a total of 9,220 from holding Check Point Software or generate 78.74% 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. Citic Telecom International
Performance |
| Timeline |
| Check Point Software |
| Citic Telecom Intern |
Check Point and Citic Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Citic Telecom
The main advantage of trading using opposite Check Point and Citic Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Citic Telecom 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 Citic Telecom will offset losses from the drop in Citic Telecom's long position.| Check Point vs. GAZTRTECHNIUADR15EO01 | Check Point vs. Hua Hong Semiconductor | Check Point vs. PKSHA TECHNOLOGY INC | Check Point vs. Taiwan Semiconductor Manufacturing |
| Citic Telecom vs. Harmony Gold Mining | Citic Telecom vs. BRAGG GAMING GRP | Citic Telecom vs. CONTAGIOUS GAMING INC | Citic Telecom vs. GameStop Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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