Correlation Between Check Point and CyberArk Software
Can any of the company-specific risk be diversified away by investing in both Check Point and CyberArk Software 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 CyberArk Software 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 CyberArk Software, you can compare the effects of market volatilities on Check Point and CyberArk Software 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 CyberArk Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and CyberArk Software.
Diversification Opportunities for Check Point and CyberArk Software
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Check and CyberArk is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and CyberArk Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberArk Software 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 CyberArk Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberArk Software has no effect on the direction of Check Point i.e., Check Point and CyberArk Software go up and down completely randomly.
Pair Corralation between Check Point and CyberArk Software
Assuming the 90 days trading horizon Check Point is expected to generate 2.25 times less return on investment than CyberArk Software. But when comparing it to its historical volatility, Check Point Software is 2.26 times less risky than CyberArk Software. It trades about 0.24 of its potential returns per unit of risk. CyberArk Software is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 25,450 in CyberArk Software on September 1, 2024 and sell it today you would earn a total of 4,580 from holding CyberArk Software or generate 18.0% 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. CyberArk Software
Performance |
| Timeline |
| Check Point Software |
| CyberArk Software |
Check Point and CyberArk Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and CyberArk Software
The main advantage of trading using opposite Check Point and CyberArk Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, CyberArk Software 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 CyberArk Software will offset losses from the drop in CyberArk Software's long position.| Check Point vs. SIVERS SEMICONDUCTORS AB | Check Point vs. Darden Restaurants | Check Point vs. Reliance Steel Aluminum | Check Point vs. Q2M Managementberatung AG |
| CyberArk Software vs. Reliance Steel Aluminum | CyberArk Software vs. LEGACY IRON ORE | CyberArk Software vs. RELIANCE STEEL AL | CyberArk Software vs. NIPPON STEEL SPADR |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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