Correlation Between Creo Medical and Check Point
Can any of the company-specific risk be diversified away by investing in both Creo Medical and Check Point 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 Creo Medical and Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Creo Medical Group and Check Point Software, you can compare the effects of market volatilities on Creo Medical and Check Point 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 Creo Medical with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creo Medical and Check Point.
Diversification Opportunities for Creo Medical and Check Point
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Creo and Check is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Creo Medical Group and Check Point Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Point Software and Creo Medical 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 Creo Medical Group are associated (or correlated) with Check Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Point Software has no effect on the direction of Creo Medical i.e., Creo Medical and Check Point go up and down completely randomly.
Pair Corralation between Creo Medical and Check Point
Assuming the 90 days trading horizon Creo Medical Group is expected to under-perform the Check Point. In addition to that, Creo Medical is 1.73 times more volatile than Check Point Software. It trades about -0.42 of its total potential returns per unit of risk. Check Point Software is currently generating about 0.06 per unit of volatility. If you would invest 17,891 in Check Point Software on August 30, 2024 and sell it today you would earn a total of 288.00 from holding Check Point Software or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Creo Medical Group vs. Check Point Software
Performance |
| Timeline |
| Creo Medical Group |
| Check Point Software |
Creo Medical and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creo Medical and Check Point
The main advantage of trading using opposite Creo Medical and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creo Medical position performs unexpectedly, Check Point 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 Check Point will offset losses from the drop in Check Point's long position.| Creo Medical vs. Samsung Electronics Co | Creo Medical vs. Samsung Electronics Co | Creo Medical vs. Hyundai Motor | Creo Medical vs. Toyota Motor Corp |
| Check Point vs. Toyota Motor Corp | Check Point vs. OTP Bank Nyrt | Check Point vs. Cognizant Technology Solutions | Check Point vs. Lendinvest PLC |
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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