Correlation Between Sunny Optical and Check Point
Can any of the company-specific risk be diversified away by investing in both Sunny Optical 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 Sunny Optical and Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunny Optical Technology and Check Point Software, you can compare the effects of market volatilities on Sunny Optical 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 Sunny Optical with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Check Point.
Diversification Opportunities for Sunny Optical and Check Point
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sunny and Check is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology 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 Sunny Optical 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 Sunny Optical Technology 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 Sunny Optical i.e., Sunny Optical and Check Point go up and down completely randomly.
Pair Corralation between Sunny Optical and Check Point
Assuming the 90 days horizon Sunny Optical is expected to generate 5.66 times less return on investment than Check Point. In addition to that, Sunny Optical is 2.37 times more volatile than Check Point Software. It trades about 0.01 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 11,970 in Check Point Software on August 25, 2024 and sell it today you would earn a total of 5,340 from holding Check Point Software or generate 44.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. Check Point Software
Performance |
| Timeline |
| Sunny Optical Technology |
| Check Point Software |
Sunny Optical and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Check Point
The main advantage of trading using opposite Sunny Optical and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical 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.| Sunny Optical vs. GOODYEAR T RUBBER | Sunny Optical vs. MACOM Technology Solutions | Sunny Optical vs. Martin Marietta Materials | Sunny Optical vs. Firan Technology Group |
| Check Point vs. Clean Energy Fuels | Check Point vs. InterContinental Hotels Group | Check Point vs. Regal Hotels International | Check Point vs. ALERION CLEANPOWER |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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