Correlation Between Check Point and Woolworths Group
Can any of the company-specific risk be diversified away by investing in both Check Point and Woolworths Group 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 Woolworths Group 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 Woolworths Group Limited, you can compare the effects of market volatilities on Check Point and Woolworths Group 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 Woolworths Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Woolworths Group.
Diversification Opportunities for Check Point and Woolworths Group
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Check and Woolworths is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Woolworths Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woolworths Group 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 Woolworths Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woolworths Group has no effect on the direction of Check Point i.e., Check Point and Woolworths Group go up and down completely randomly.
Pair Corralation between Check Point and Woolworths Group
Assuming the 90 days trading horizon Check Point Software is expected to generate 1.51 times more return on investment than Woolworths Group. However, Check Point is 1.51 times more volatile than Woolworths Group Limited. It trades about 0.27 of its potential returns per unit of risk. Woolworths Group Limited is currently generating about 0.06 per unit of risk. If you would invest 16,505 in Check Point Software on September 13, 2024 and sell it today you would earn a total of 1,355 from holding Check Point Software or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Check Point Software vs. Woolworths Group Limited
Performance |
| Timeline |
| Check Point Software |
| Woolworths Group |
Check Point and Woolworths Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Woolworths Group
The main advantage of trading using opposite Check Point and Woolworths Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Woolworths Group 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 Woolworths Group will offset losses from the drop in Woolworths Group's long position.| Check Point vs. Apple Inc | Check Point vs. Apple Inc | Check Point vs. Apple Inc | Check Point vs. Apple Inc |
| Woolworths Group vs. Loblaw Companies Limited | Woolworths Group vs. Superior Plus Corp | Woolworths Group vs. SIVERS SEMICONDUCTORS AB | Woolworths Group vs. Norsk Hydro ASA |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |