Correlation Between Check Point and Brinker International
Can any of the company-specific risk be diversified away by investing in both Check Point and Brinker International 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 Brinker International 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 Brinker International, you can compare the effects of market volatilities on Check Point and Brinker International 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 Brinker International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Brinker International.
Diversification Opportunities for Check Point and Brinker International
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Check and Brinker is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Brinker International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinker International 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 Brinker International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinker International has no effect on the direction of Check Point i.e., Check Point and Brinker International go up and down completely randomly.
Pair Corralation between Check Point and Brinker International
Assuming the 90 days trading horizon Check Point is expected to generate 1.31 times less return on investment than Brinker International. But when comparing it to its historical volatility, Check Point Software is 2.03 times less risky than Brinker International. It trades about 0.27 of its potential returns per unit of risk. Brinker International is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 11,100 in Brinker International on September 13, 2024 and sell it today you would earn a total of 1,200 from holding Brinker International or generate 10.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Check Point Software vs. Brinker International
Performance |
| Timeline |
| Check Point Software |
| Brinker International |
Check Point and Brinker International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Brinker International
The main advantage of trading using opposite Check Point and Brinker International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Brinker International 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 Brinker International will offset losses from the drop in Brinker International's long position.| Check Point vs. Apple Inc | Check Point vs. Apple Inc | Check Point vs. Apple Inc | Check Point vs. Apple Inc |
| Brinker International vs. PROSIEBENSAT1 MEDIADR4 | Brinker International vs. International Game Technology | Brinker International vs. PLAYSTUDIOS A DL 0001 | Brinker International vs. PT Global Mediacom |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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