Correlation Between Check Point and Fica Empreendimentos

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

Diversification Opportunities for Check Point and Fica Empreendimentos

-0.33

Correlation Coefficient

Check Point  Fica Empreendimentos

Very good diversification

The 3 months correlation between Check and Fica is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Fica Empreendimentos Imobiliar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fica Empreendimentos 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 Fica Empreendimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fica Empreendimentos has no effect on the direction of Check Point i.e., Check Point and Fica Empreendimentos go up and down completely randomly.

Pair Corralation between Check Point and Fica Empreendimentos

Assuming the 90 days trading horizon Check Point Software is expected to generate 0.83 times more return on investment than Fica Empreendimentos. However, Check Point Software is 1.2 times less risky than Fica Empreendimentos. It trades about 0.26 of its potential returns per unit of risk. Fica Empreendimentos Imobiliarios is currently generating about -0.03 per unit of risk. If you would invest  45,135  in Check Point Software on October 6, 2024 and sell it today you would earn a total of  13,619  from holding Check Point Software or generate 30.17% return on investment over 90 days.

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

Check Point Software  vs.  Fica Empreendimentos Imobiliar

Check Point Software

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Check Point Software are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical indicators, Check Point sustained solid returns over the last few months and may actually be approaching a breakup point.

Fica Empreendimentos

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fica Empreendimentos Imobiliarios are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Fica Empreendimentos may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Check Point and Fica Empreendimentos

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

The idea behind Check Point Software and Fica Empreendimentos Imobiliarios 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.