Correlation Between Check Point and SURETRACK MON

Can any of the company-specific risk be diversified away by investing in both Check Point and SURETRACK MON 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 SURETRACK MON 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 SURETRACK MON , you can compare the effects of market volatilities on Check Point and SURETRACK MON 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 SURETRACK MON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and SURETRACK MON.

Diversification Opportunities for Check Point and SURETRACK MON

0.29

Correlation Coefficient

Check Point  SURETRACK MON

Modest diversification

The 3 months correlation between Check and SURETRACK is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and SURETRACK MON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SURETRACK MON 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 SURETRACK MON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SURETRACK MON has no effect on the direction of Check Point i.e., Check Point and SURETRACK MON go up and down completely randomly.

Pair Corralation between Check Point and SURETRACK MON

Assuming the 90 days trading horizon Check Point Software is expected to under-perform the SURETRACK MON. But the stock apears to be less risky and, when comparing its historical volatility, Check Point Software is 5.99 times less risky than SURETRACK MON. The stock trades about -0.04 of its potential returns per unit of risk. The SURETRACK MON is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  18.00  in SURETRACK MON on October 24, 2024 and sell it today you would earn a total of  87.00  from holding SURETRACK MON or generate 483.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

Check Point Software  vs.  SURETRACK MON

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 comparatively stable basic indicators, Check Point is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

SURETRACK MON

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SURETRACK MON are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, SURETRACK MON exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Check Point and SURETRACK MON

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

The idea behind Check Point Software and SURETRACK MON 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.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.