Correlation Between USWE SPORTS and Check Point
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS 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 USWE SPORTS and Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USWE SPORTS AB and Check Point Software, you can compare the effects of market volatilities on USWE SPORTS 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 USWE SPORTS with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and Check Point.
Diversification Opportunities for USWE SPORTS and Check Point
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between USWE and Check is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB 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 USWE SPORTS 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 USWE SPORTS AB 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 USWE SPORTS i.e., USWE SPORTS and Check Point go up and down completely randomly.
Pair Corralation between USWE SPORTS and Check Point
Assuming the 90 days horizon USWE SPORTS is expected to generate 5.61 times less return on investment than Check Point. In addition to that, USWE SPORTS is 1.46 times more volatile than Check Point Software. It trades about 0.02 of its total potential returns per unit of risk. Check Point Software is currently generating about 0.17 per unit of volatility. If you would invest 17,885 in Check Point Software on December 28, 2024 and sell it today you would earn a total of 3,265 from holding Check Point Software or generate 18.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.41% |
Values | Daily Returns |
USWE SPORTS AB vs. Check Point Software
Performance |
Timeline |
USWE SPORTS AB |
Check Point Software |
USWE SPORTS and Check Point Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with USWE SPORTS and Check Point
The main advantage of trading using opposite USWE SPORTS and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS 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.USWE SPORTS vs. Corsair Gaming | USWE SPORTS vs. MOVIE GAMES SA | USWE SPORTS vs. REGAL HOTEL INTL | USWE SPORTS vs. Mitsui Chemicals |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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