Correlation Between Check Point and SECURITAS
Can any of the company-specific risk be diversified away by investing in both Check Point and SECURITAS 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 SECURITAS 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 SECURITAS B , you can compare the effects of market volatilities on Check Point and SECURITAS 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 SECURITAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and SECURITAS.
Diversification Opportunities for Check Point and SECURITAS
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Check and SECURITAS is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and SECURITAS B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SECURITAS B 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 SECURITAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SECURITAS B has no effect on the direction of Check Point i.e., Check Point and SECURITAS go up and down completely randomly.
Pair Corralation between Check Point and SECURITAS
Assuming the 90 days trading horizon Check Point is expected to generate 3.18 times less return on investment than SECURITAS. But when comparing it to its historical volatility, Check Point Software is 1.54 times less risky than SECURITAS. It trades about 0.06 of its potential returns per unit of risk. SECURITAS B is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 669.00 in SECURITAS B on September 1, 2024 and sell it today you would earn a total of 513.00 from holding SECURITAS B or generate 76.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.48% |
| Values | Daily Returns |
Check Point Software vs. SECURITAS B
Performance |
| Timeline |
| Check Point Software |
| SECURITAS B |
Check Point and SECURITAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and SECURITAS
The main advantage of trading using opposite Check Point and SECURITAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, SECURITAS 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 SECURITAS will offset losses from the drop in SECURITAS'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 |
| SECURITAS vs. ADRIATIC METALS LS 013355 | SECURITAS vs. Check Point Software | SECURITAS vs. Micron Technology | SECURITAS vs. Jacquet Metal Service |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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