Correlation Between Lion One and Check Point
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Check Point Software, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Check Point.
Diversification Opportunities for Lion One and Check Point
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lion and Check is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals 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 Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and Check Point go up and down completely randomly.
Pair Corralation between Lion One and Check Point
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Check Point. In addition to that, Lion One is 1.08 times more volatile than Check Point Software. It trades about -0.17 of its total potential returns per unit of risk. Check Point Software is currently generating about -0.14 per unit of volatility. If you would invest 19,225 in Check Point Software on August 29, 2024 and sell it today you would lose (2,145) from holding Check Point Software or give up 11.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Check Point Software
Performance |
| Timeline |
| Lion One Metals |
| Check Point Software |
Lion One and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Check Point
The main advantage of trading using opposite Lion One and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. Franco Nevada | Lion One vs. Agnico Eagle Mines | Lion One vs. Superior Plus Corp | Lion One vs. NMI Holdings |
| Check Point vs. YOOMA WELLNESS INC | Check Point vs. Natural Health Trends | Check Point vs. Diamondrock Hospitality Co | Check Point vs. NORWEGIAN AIR SHUT |
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 Stocks Directory module to find actively traded stocks across global markets.
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