Correlation Between Check Point and EHEALTH
Can any of the company-specific risk be diversified away by investing in both Check Point and EHEALTH 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 EHEALTH 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 EHEALTH, you can compare the effects of market volatilities on Check Point and EHEALTH 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 EHEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and EHEALTH.
Diversification Opportunities for Check Point and EHEALTH
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Check and EHEALTH is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and EHEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EHEALTH 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 EHEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EHEALTH has no effect on the direction of Check Point i.e., Check Point and EHEALTH go up and down completely randomly.
Pair Corralation between Check Point and EHEALTH
Assuming the 90 days trading horizon Check Point is expected to generate 7.58 times less return on investment than EHEALTH. But when comparing it to its historical volatility, Check Point Software is 3.43 times less risky than EHEALTH. It trades about 0.17 of its potential returns per unit of risk. EHEALTH is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 718.00 in EHEALTH on October 19, 2024 and sell it today you would earn a total of 213.00 from holding EHEALTH or generate 29.67% 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. EHEALTH
Performance |
| Timeline |
| Check Point Software |
| EHEALTH |
Check Point and EHEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and EHEALTH
The main advantage of trading using opposite Check Point and EHEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, EHEALTH 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 EHEALTH will offset losses from the drop in EHEALTH's long position.| Check Point vs. AUSNUTRIA DAIRY | Check Point vs. ScanSource | Check Point vs. Lery Seafood Group | Check Point vs. Urban Outfitters |
| EHEALTH vs. Firan Technology Group | EHEALTH vs. Adtalem Global Education | EHEALTH vs. TAL Education Group | EHEALTH vs. Check Point Software |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |