Correlation Between Check Point and RWE AG
Can any of the company-specific risk be diversified away by investing in both Check Point and RWE AG 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 RWE AG 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 RWE AG, you can compare the effects of market volatilities on Check Point and RWE AG 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 RWE AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and RWE AG.
Diversification Opportunities for Check Point and RWE AG
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Check and RWE is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and RWE AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RWE AG 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 RWE AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RWE AG has no effect on the direction of Check Point i.e., Check Point and RWE AG go up and down completely randomly.
Pair Corralation between Check Point and RWE AG
Assuming the 90 days trading horizon Check Point Software is expected to generate 1.02 times more return on investment than RWE AG. However, Check Point is 1.02 times more volatile than RWE AG. It trades about 0.08 of its potential returns per unit of risk. RWE AG is currently generating about -0.03 per unit of risk. If you would invest 12,040 in Check Point Software on September 12, 2024 and sell it today you would earn a total of 5,675 from holding Check Point Software or generate 47.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Check Point Software vs. RWE AG
Performance |
| Timeline |
| Check Point Software |
| RWE AG |
Check Point and RWE AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and RWE AG
The main advantage of trading using opposite Check Point and RWE AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, RWE AG 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 RWE AG will offset losses from the drop in RWE AG's long position.| Check Point vs. Apple Inc | Check Point vs. Apple Inc | Check Point vs. Apple Inc | Check Point vs. Apple Inc |
| RWE AG vs. X FAB Silicon Foundries | RWE AG vs. InPlay Oil Corp | RWE AG vs. TRAVEL LEISURE DL 01 | RWE AG 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |