Correlation Between Check Point and State Street
Can any of the company-specific risk be diversified away by investing in both Check Point and State Street 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 State Street 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 State Street, you can compare the effects of market volatilities on Check Point and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and State Street.
Diversification Opportunities for Check Point and State Street
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Check and State is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and State Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street has no effect on the direction of Check Point i.e., Check Point and State Street go up and down completely randomly.
Pair Corralation between Check Point and State Street
Assuming the 90 days trading horizon Check Point Software is expected to generate 1.01 times more return on investment than State Street. However, Check Point is 1.01 times more volatile than State Street. It trades about 0.07 of its potential returns per unit of risk. State Street is currently generating about 0.03 per unit of risk. If you would invest 12,000 in Check Point Software on January 6, 2025 and sell it today you would earn a total of 8,120 from holding Check Point Software or generate 67.67% 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. State Street
Performance |
| Timeline |
| Check Point Software |
| State Street |
Check Point and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and State Street
The main advantage of trading using opposite Check Point and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| Check Point vs. MONEYSUPERMARKET | Check Point vs. Moneysupermarket Group PLC | Check Point vs. PennyMac Mortgage Investment | Check Point vs. Gladstone Investment |
| State Street vs. Blackstone Group | State Street vs. The Bank of | State Street vs. Ameriprise Financial | State Street vs. EQT AB |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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