Correlation Between Check Point and St Galler

Can any of the company-specific risk be diversified away by investing in both Check Point and St Galler 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 Check Point and St Galler into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Check Point Software and St Galler Kantonalbank, you can compare the effects of market volatilities on Check Point and St Galler 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 Check Point with a short position of St Galler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and St Galler.

Diversification Opportunities for Check Point and St Galler

0.11

Correlation Coefficient

Check Point  St Galler

Average diversification

The 3 months correlation between Check and 0QQZ is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and St Galler Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Galler Kantonalbank and Check Point 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 Check Point Software are associated (or correlated) with St Galler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Galler Kantonalbank has no effect on the direction of Check Point i.e., Check Point and St Galler go up and down completely randomly.

Pair Corralation between Check Point and St Galler

Assuming the 90 days trading horizon Check Point Software is expected to under-perform the St Galler. In addition to that, Check Point is 1.44 times more volatile than St Galler Kantonalbank. It trades about -0.02 of its total potential returns per unit of risk. St Galler Kantonalbank is currently generating about 0.38 per unit of volatility. If you would invest  42,850  in St Galler Kantonalbank on October 22, 2024 and sell it today you would earn a total of  2,400  from holding St Galler Kantonalbank or generate 5.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Check Point Software  vs.  St Galler Kantonalbank

Check Point Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Check Point Software has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

St Galler Kantonalbank

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in St Galler Kantonalbank are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, St Galler is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Check Point and St Galler

The main advantage of trading using opposite Check Point and St Galler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, St Galler 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 St Galler will offset losses from the drop in St Galler's long position.

The idea behind Check Point Software and St Galler Kantonalbank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.