Correlation Between Lendinvest PLC and Check Point
Can any of the company-specific risk be diversified away by investing in both Lendinvest PLC 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 Lendinvest PLC and Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendinvest PLC and Check Point Software, you can compare the effects of market volatilities on Lendinvest PLC 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 Lendinvest PLC with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendinvest PLC and Check Point.
Diversification Opportunities for Lendinvest PLC and Check Point
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lendinvest and Check is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest 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 Lendinvest PLC 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 Lendinvest 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 Lendinvest PLC i.e., Lendinvest PLC and Check Point go up and down completely randomly.
Pair Corralation between Lendinvest PLC and Check Point
Assuming the 90 days trading horizon Lendinvest PLC is expected to under-perform the Check Point. In addition to that, Lendinvest PLC is 1.33 times more volatile than Check Point Software. It trades about -0.11 of its total potential returns per unit of risk. Check Point Software is currently generating about 0.08 per unit of volatility. If you would invest 13,127 in Check Point Software on November 27, 2024 and sell it today you would earn a total of 8,329 from holding Check Point Software or generate 63.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Lendinvest PLC vs. Check Point Software
Performance |
| Timeline |
| Lendinvest PLC |
| Check Point Software |
Lendinvest PLC and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendinvest PLC and Check Point
The main advantage of trading using opposite Lendinvest PLC and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest PLC 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.| Lendinvest PLC vs. Livermore Investments Group | Lendinvest PLC vs. Lloyds Banking Group | Lendinvest PLC vs. Liechtensteinische Landesbank AG | Lendinvest PLC vs. National Beverage Corp |
| Check Point vs. Everyman Media Group | Check Point vs. Monster Beverage Corp | Check Point vs. Jupiter Fund Management | Check Point vs. Live Nation Entertainment |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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