Correlation Between Check Point and AECOM TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Check Point and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY 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 AECOM TECHNOLOGY, you can compare the effects of market volatilities on Check Point and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and AECOM TECHNOLOGY.
Diversification Opportunities for Check Point and AECOM TECHNOLOGY
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Check and AECOM is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and AECOM TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM TECHNOLOGY 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 AECOM TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM TECHNOLOGY has no effect on the direction of Check Point i.e., Check Point and AECOM TECHNOLOGY go up and down completely randomly.
Pair Corralation between Check Point and AECOM TECHNOLOGY
Assuming the 90 days trading horizon Check Point Software is expected to generate 1.1 times more return on investment than AECOM TECHNOLOGY. However, Check Point is 1.1 times more volatile than AECOM TECHNOLOGY. It trades about 0.08 of its potential returns per unit of risk. AECOM TECHNOLOGY is currently generating about 0.08 per unit of risk. If you would invest 11,500 in Check Point Software on August 31, 2024 and sell it today you would earn a total of 5,725 from holding Check Point Software or generate 49.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Check Point Software vs. AECOM TECHNOLOGY
Performance |
| Timeline |
| Check Point Software |
| AECOM TECHNOLOGY |
Check Point and AECOM TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and AECOM TECHNOLOGY
The main advantage of trading using opposite Check Point and AECOM TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, AECOM TECHNOLOGY 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 AECOM TECHNOLOGY will offset losses from the drop in AECOM TECHNOLOGY's long position.| Check Point vs. CVW CLEANTECH INC | Check Point vs. NorAm Drilling AS | Check Point vs. BORR DRILLING NEW | Check Point vs. Clean Energy Fuels |
| AECOM TECHNOLOGY vs. SIVERS SEMICONDUCTORS AB | AECOM TECHNOLOGY vs. Darden Restaurants | AECOM TECHNOLOGY vs. Reliance Steel Aluminum | AECOM TECHNOLOGY vs. Q2M Managementberatung AG |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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