Correlation Between MAHLE Metal and Check Point
Can any of the company-specific risk be diversified away by investing in both MAHLE Metal 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 MAHLE Metal and Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAHLE Metal Leve and Check Point Software, you can compare the effects of market volatilities on MAHLE Metal 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 MAHLE Metal with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and Check Point.
Diversification Opportunities for MAHLE Metal and Check Point
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MAHLE and Check is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve 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 MAHLE Metal 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 MAHLE Metal Leve 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 MAHLE Metal i.e., MAHLE Metal and Check Point go up and down completely randomly.
Pair Corralation between MAHLE Metal and Check Point
Assuming the 90 days trading horizon MAHLE Metal is expected to generate 1.46 times less return on investment than Check Point. But when comparing it to its historical volatility, MAHLE Metal Leve is 1.03 times less risky than Check Point. It trades about 0.21 of its potential returns per unit of risk. Check Point Software is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 57,904 in Check Point Software on November 5, 2024 and sell it today you would earn a total of 5,588 from holding Check Point Software or generate 9.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAHLE Metal Leve vs. Check Point Software
Performance |
| Timeline |
| MAHLE Metal Leve |
| Check Point Software |
MAHLE Metal and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAHLE Metal and Check Point
The main advantage of trading using opposite MAHLE Metal and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal 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.| MAHLE Metal vs. Tupy SA | MAHLE Metal vs. Engie Brasil Energia | MAHLE Metal vs. Grendene SA | MAHLE Metal vs. M Dias Branco |
| Check Point vs. United Natural Foods, | Check Point vs. Lloyds Banking Group | Check Point vs. Synchrony Financial | Check Point vs. Tyson Foods |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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