Correlation Between IDEXX Laboratories and Check-Cap
Can any of the company-specific risk be diversified away by investing in both IDEXX Laboratories and Check-Cap 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 IDEXX Laboratories and Check-Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDEXX Laboratories and Check Cap, you can compare the effects of market volatilities on IDEXX Laboratories and Check-Cap 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 IDEXX Laboratories with a short position of Check-Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDEXX Laboratories and Check-Cap.
Diversification Opportunities for IDEXX Laboratories and Check-Cap
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IDEXX and Check-Cap is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding IDEXX Laboratories and Check Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Cap and IDEXX Laboratories 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 IDEXX Laboratories are associated (or correlated) with Check-Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Cap has no effect on the direction of IDEXX Laboratories i.e., IDEXX Laboratories and Check-Cap go up and down completely randomly.
Pair Corralation between IDEXX Laboratories and Check-Cap
Assuming the 90 days horizon IDEXX Laboratories is expected to generate 0.41 times more return on investment than Check-Cap. However, IDEXX Laboratories is 2.47 times less risky than Check-Cap. It trades about -0.06 of its potential returns per unit of risk. Check Cap is currently generating about -0.18 per unit of risk. If you would invest 45,720 in IDEXX Laboratories on September 1, 2024 and sell it today you would lose (5,730) from holding IDEXX Laboratories or give up 12.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IDEXX Laboratories vs. Check Cap
Performance |
| Timeline |
| IDEXX Laboratories |
| Check Cap |
IDEXX Laboratories and Check-Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDEXX Laboratories and Check-Cap
The main advantage of trading using opposite IDEXX Laboratories and Check-Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDEXX Laboratories position performs unexpectedly, Check-Cap 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-Cap will offset losses from the drop in Check-Cap's long position.| IDEXX Laboratories vs. BOSTON BEER A | IDEXX Laboratories vs. Take Two Interactive Software | IDEXX Laboratories vs. MOLSON RS BEVERAGE | IDEXX Laboratories vs. Magic Software Enterprises |
| Check-Cap vs. Cardinal Health | Check-Cap vs. Sabra Health Care | Check-Cap vs. Natural Health Trends | Check-Cap vs. PKSHA TECHNOLOGY INC |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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