Correlation Between Empire Metals and Check Point
Can any of the company-specific risk be diversified away by investing in both Empire Metals 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 Empire Metals and Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire Metals Limited and Check Point Software, you can compare the effects of market volatilities on Empire Metals 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 Empire Metals with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Metals and Check Point.
Diversification Opportunities for Empire Metals and Check Point
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Empire and Check is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Empire Metals Limited 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 Empire Metals 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 Empire Metals Limited 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 Empire Metals i.e., Empire Metals and Check Point go up and down completely randomly.
Pair Corralation between Empire Metals and Check Point
Assuming the 90 days trading horizon Empire Metals Limited is expected to generate 4.16 times more return on investment than Check Point. However, Empire Metals is 4.16 times more volatile than Check Point Software. It trades about 0.07 of its potential returns per unit of risk. Check Point Software is currently generating about 0.06 per unit of risk. If you would invest 170.00 in Empire Metals Limited on August 30, 2024 and sell it today you would earn a total of 420.00 from holding Empire Metals Limited or generate 247.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.97% |
| Values | Daily Returns |
Empire Metals Limited vs. Check Point Software
Performance |
| Timeline |
| Empire Metals Limited |
| Check Point Software |
Empire Metals and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire Metals and Check Point
The main advantage of trading using opposite Empire Metals and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Metals 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.| Empire Metals vs. Air Products Chemicals | Empire Metals vs. Sealed Air Corp | Empire Metals vs. Pentair PLC | Empire Metals vs. Advanced Medical Solutions |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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