Correlation Between Check Point and Chengdu PUTIAN
Can any of the company-specific risk be diversified away by investing in both Check Point and Chengdu PUTIAN 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 Chengdu PUTIAN 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 Chengdu PUTIAN Telecommunications, you can compare the effects of market volatilities on Check Point and Chengdu PUTIAN 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 Chengdu PUTIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Chengdu PUTIAN.
Diversification Opportunities for Check Point and Chengdu PUTIAN
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Check and Chengdu is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Chengdu PUTIAN Telecommunicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu PUTIAN Telec 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 Chengdu PUTIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu PUTIAN Telec has no effect on the direction of Check Point i.e., Check Point and Chengdu PUTIAN go up and down completely randomly.
Pair Corralation between Check Point and Chengdu PUTIAN
Assuming the 90 days trading horizon Check Point Software is expected to generate 0.5 times more return on investment than Chengdu PUTIAN. However, Check Point Software is 2.0 times less risky than Chengdu PUTIAN. It trades about 0.27 of its potential returns per unit of risk. Chengdu PUTIAN Telecommunications is currently generating about 0.11 per unit of risk. If you would invest 17,430 in Check Point Software on November 1, 2024 and sell it today you would earn a total of 3,430 from holding Check Point Software or generate 19.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.44% |
| Values | Daily Returns |
Check Point Software vs. Chengdu PUTIAN Telecommunicati
Performance |
| Timeline |
| Check Point Software |
| Chengdu PUTIAN Telec |
Check Point and Chengdu PUTIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Chengdu PUTIAN
The main advantage of trading using opposite Check Point and Chengdu PUTIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Chengdu PUTIAN 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 Chengdu PUTIAN will offset losses from the drop in Chengdu PUTIAN's long position.| Check Point vs. Apple Inc | Check Point vs. Apple Inc | Check Point vs. Apple Inc | Check Point vs. Apple Inc |
| Chengdu PUTIAN vs. PRECISION DRILLING P | Chengdu PUTIAN vs. ATOSS SOFTWARE | Chengdu PUTIAN vs. UPDATE SOFTWARE | Chengdu PUTIAN vs. BORR DRILLING NEW |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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