Correlation Between Check Point and Clean Energy
Can any of the company-specific risk be diversified away by investing in both Check Point and Clean Energy 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 Clean Energy 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 Clean Energy Fuels, you can compare the effects of market volatilities on Check Point and Clean Energy 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 Clean Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Clean Energy.
Diversification Opportunities for Check Point and Clean Energy
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Check and Clean is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Clean Energy Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Energy Fuels 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 Clean Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Energy Fuels has no effect on the direction of Check Point i.e., Check Point and Clean Energy go up and down completely randomly.
Pair Corralation between Check Point and Clean Energy
Assuming the 90 days trading horizon Check Point is expected to generate 1.36 times less return on investment than Clean Energy. But when comparing it to its historical volatility, Check Point Software is 3.65 times less risky than Clean Energy. It trades about 0.32 of its potential returns per unit of risk. Clean Energy Fuels is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 262.00 in Clean Energy Fuels on September 3, 2024 and sell it today you would earn a total of 29.00 from holding Clean Energy Fuels or generate 11.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Check Point Software vs. Clean Energy Fuels
Performance |
| Timeline |
| Check Point Software |
| Clean Energy Fuels |
Check Point and Clean Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Clean Energy
The main advantage of trading using opposite Check Point and Clean Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Clean Energy 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 Clean Energy will offset losses from the drop in Clean Energy's long position.| Check Point vs. Alfa Financial Software | Check Point vs. ASURE SOFTWARE | Check Point vs. CPU SOFTWAREHOUSE | Check Point vs. USU Software AG |
| Clean Energy vs. Marathon Petroleum Corp | Clean Energy vs. Neste Oyj | Clean Energy vs. ENEOS Holdings | Clean Energy vs. PTT OILRETBUS FOR BA10 |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |