Correlation Between Check Point and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both Check Point and Jacquet Metal 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 Jacquet Metal 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 Jacquet Metal Service, you can compare the effects of market volatilities on Check Point and Jacquet Metal 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 Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Jacquet Metal.
Diversification Opportunities for Check Point and Jacquet Metal
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Check and Jacquet is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service 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 Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of Check Point i.e., Check Point and Jacquet Metal go up and down completely randomly.
Pair Corralation between Check Point and Jacquet Metal
Assuming the 90 days trading horizon Check Point Software is expected to under-perform the Jacquet Metal. In addition to that, Check Point is 2.37 times more volatile than Jacquet Metal Service. It trades about -0.14 of its total potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.18 per unit of volatility. If you would invest 1,642 in Jacquet Metal Service on August 29, 2024 and sell it today you would lose (94.00) from holding Jacquet Metal Service or give up 5.72% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Check Point Software vs. Jacquet Metal Service
Performance |
Timeline |
Check Point Software |
Jacquet Metal Service |
Check Point and Jacquet Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Check Point and Jacquet Metal
The main advantage of trading using opposite Check Point and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Jacquet Metal 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 Jacquet Metal will offset losses from the drop in Jacquet Metal's long position.Check Point vs. YOOMA WELLNESS INC | Check Point vs. Natural Health Trends | Check Point vs. Diamondrock Hospitality Co | Check Point vs. NORWEGIAN AIR SHUT |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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