Correlation Between Check Point and MAGNA INTL
Can any of the company-specific risk be diversified away by investing in both Check Point and MAGNA INTL 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 MAGNA INTL 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 MAGNA INTL, you can compare the effects of market volatilities on Check Point and MAGNA INTL 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 MAGNA INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and MAGNA INTL.
Diversification Opportunities for Check Point and MAGNA INTL
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Check and MAGNA is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and MAGNA INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGNA INTL 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 MAGNA INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAGNA INTL has no effect on the direction of Check Point i.e., Check Point and MAGNA INTL go up and down completely randomly.
Pair Corralation between Check Point and MAGNA INTL
Assuming the 90 days trading horizon Check Point Software is expected to generate 1.18 times more return on investment than MAGNA INTL. However, Check Point is 1.18 times more volatile than MAGNA INTL. It trades about 0.1 of its potential returns per unit of risk. MAGNA INTL is currently generating about 0.03 per unit of risk. If you would invest 13,855 in Check Point Software on September 1, 2024 and sell it today you would earn a total of 3,370 from holding Check Point Software or generate 24.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.24% |
| Values | Daily Returns |
Check Point Software vs. MAGNA INTL
Performance |
| Timeline |
| Check Point Software |
| MAGNA INTL |
Check Point and MAGNA INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and MAGNA INTL
The main advantage of trading using opposite Check Point and MAGNA INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, MAGNA INTL 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 MAGNA INTL will offset losses from the drop in MAGNA INTL'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 |
| MAGNA INTL vs. Arrow Electronics | MAGNA INTL vs. Citic Telecom International | MAGNA INTL vs. Nucletron Electronic Aktiengesellschaft | MAGNA INTL vs. ELECTRONIC ARTS |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |