Correlation Between First and Check Point
Can any of the company-specific risk be diversified away by investing in both First 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 First and Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Class Metals and Check Point Software, you can compare the effects of market volatilities on First 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 First with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of First and Check Point.
Diversification Opportunities for First and Check Point
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Check is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding First Class Metals 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 First 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 First Class Metals 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 First i.e., First and Check Point go up and down completely randomly.
Pair Corralation between First and Check Point
Assuming the 90 days trading horizon First Class Metals is expected to under-perform the Check Point. In addition to that, First is 2.76 times more volatile than Check Point Software. It trades about -0.29 of its total potential returns per unit of risk. Check Point Software is currently generating about -0.15 per unit of volatility. If you would invest 18,784 in Check Point Software on October 12, 2024 and sell it today you would lose (776.00) from holding Check Point Software or give up 4.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
First Class Metals vs. Check Point Software
Performance |
| Timeline |
| First Class Metals |
| Check Point Software |
First and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First and Check Point
The main advantage of trading using opposite First and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First 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.| First vs. Silvercorp Metals | First vs. Cornish Metals | First vs. Central Asia Metals | First vs. Mineral Financial Investments |
| Check Point vs. Solstad Offshore ASA | Check Point vs. Morgan Advanced Materials | Check Point vs. First Class Metals | Check Point vs. PPHE Hotel Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| 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 | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |