Correlation Between Check Point and CEWE Stiftung
Can any of the company-specific risk be diversified away by investing in both Check Point and CEWE Stiftung 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 CEWE Stiftung 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 CEWE Stiftung Co, you can compare the effects of market volatilities on Check Point and CEWE Stiftung 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 CEWE Stiftung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and CEWE Stiftung.
Diversification Opportunities for Check Point and CEWE Stiftung
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Check and CEWE is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and CEWE Stiftung Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEWE Stiftung 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 CEWE Stiftung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEWE Stiftung has no effect on the direction of Check Point i.e., Check Point and CEWE Stiftung go up and down completely randomly.
Pair Corralation between Check Point and CEWE Stiftung
Assuming the 90 days trading horizon Check Point Software is expected to generate 1.2 times more return on investment than CEWE Stiftung. However, Check Point is 1.2 times more volatile than CEWE Stiftung Co. It trades about 0.08 of its potential returns per unit of risk. CEWE Stiftung Co is currently generating about 0.02 per unit of risk. If you would invest 13,585 in Check Point Software on September 14, 2024 and sell it today you would earn a total of 4,600 from holding Check Point Software or generate 33.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Check Point Software vs. CEWE Stiftung Co
Performance |
| Timeline |
| Check Point Software |
| CEWE Stiftung |
Check Point and CEWE Stiftung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and CEWE Stiftung
The main advantage of trading using opposite Check Point and CEWE Stiftung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, CEWE Stiftung 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 CEWE Stiftung will offset losses from the drop in CEWE Stiftung's long position.| Check Point vs. NISSAN CHEMICAL IND | Check Point vs. PTT Global Chemical | Check Point vs. Aedas Homes SA | Check Point vs. CHEMICAL INDUSTRIES |
| CEWE Stiftung vs. Service International | CEWE Stiftung vs. Bright Horizons Family | CEWE Stiftung vs. BOYD GROUP SERVICES | CEWE Stiftung vs. CVS Group plc |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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