Correlation Between Ithaca Energy and Check Point
Can any of the company-specific risk be diversified away by investing in both Ithaca Energy 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 Ithaca Energy and Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ithaca Energy PLC and Check Point Software, you can compare the effects of market volatilities on Ithaca Energy 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 Ithaca Energy with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ithaca Energy and Check Point.
Diversification Opportunities for Ithaca Energy and Check Point
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ithaca and Check is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ithaca Energy PLC 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 Ithaca Energy 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 Ithaca Energy PLC 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 Ithaca Energy i.e., Ithaca Energy and Check Point go up and down completely randomly.
Pair Corralation between Ithaca Energy and Check Point
Assuming the 90 days trading horizon Ithaca Energy is expected to generate 1.46 times less return on investment than Check Point. In addition to that, Ithaca Energy is 3.4 times more volatile than Check Point Software. It trades about 0.03 of its total potential returns per unit of risk. Check Point Software is currently generating about 0.13 per unit of volatility. If you would invest 17,519 in Check Point Software on August 31, 2024 and sell it today you would earn a total of 660.00 from holding Check Point Software or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ithaca Energy PLC vs. Check Point Software
Performance |
| Timeline |
| Ithaca Energy PLC |
| Check Point Software |
Ithaca Energy and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ithaca Energy and Check Point
The main advantage of trading using opposite Ithaca Energy and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ithaca Energy 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.| Ithaca Energy vs. Check Point Software | Ithaca Energy vs. Universal Display Corp | Ithaca Energy vs. CleanTech Lithium plc | Ithaca Energy vs. AMG Advanced Metallurgical |
| Check Point vs. Charter Communications Cl | Check Point vs. Tatton Asset Management | Check Point vs. Ecclesiastical Insurance Office | Check Point vs. Taylor Maritime Investments |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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