Correlation Between FAST RETAIL and Check Point
Can any of the company-specific risk be diversified away by investing in both FAST RETAIL 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 FAST RETAIL and Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FAST RETAIL ADR and Check Point Software, you can compare the effects of market volatilities on FAST RETAIL 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 FAST RETAIL with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and Check Point.
Diversification Opportunities for FAST RETAIL and Check Point
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FAST and Check is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR 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 FAST RETAIL 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 FAST RETAIL ADR 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 FAST RETAIL i.e., FAST RETAIL and Check Point go up and down completely randomly.
Pair Corralation between FAST RETAIL and Check Point
Assuming the 90 days trading horizon FAST RETAIL is expected to generate 1.19 times less return on investment than Check Point. In addition to that, FAST RETAIL is 1.21 times more volatile than Check Point Software. It trades about 0.22 of its total potential returns per unit of risk. Check Point Software is currently generating about 0.32 per unit of volatility. If you would invest 15,655 in Check Point Software on September 3, 2024 and sell it today you would earn a total of 1,570 from holding Check Point Software or generate 10.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FAST RETAIL ADR vs. Check Point Software
Performance |
| Timeline |
| FAST RETAIL ADR |
| Check Point Software |
FAST RETAIL and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAST RETAIL and Check Point
The main advantage of trading using opposite FAST RETAIL and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL 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.| FAST RETAIL vs. JIAHUA STORES | FAST RETAIL vs. FEMALE HEALTH | FAST RETAIL vs. EPSILON HEALTHCARE LTD | FAST RETAIL vs. MARKET VECTR RETAIL |
| Check Point vs. Alfa Financial Software | Check Point vs. ASURE SOFTWARE | Check Point vs. CPU SOFTWAREHOUSE | Check Point vs. USU Software AG |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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