Correlation Between Check Point and BetterU Education

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

Diversification Opportunities for Check Point and BetterU Education

0.0

Correlation Coefficient

Check Point  BetterU Education

Pay attention - limited upside

The 3 months correlation between Check and BetterU is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and betterU Education Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on betterU Education Corp 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 BetterU Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of betterU Education Corp has no effect on the direction of Check Point i.e., Check Point and BetterU Education go up and down completely randomly.

Pair Corralation between Check Point and BetterU Education

If you would invest  11,725  in Check Point Software on October 22, 2024 and sell it today you would earn a total of  6,410  from holding Check Point Software or generate 54.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.75%
Values	Daily Returns

Check Point Software  vs.  betterU Education Corp

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 very healthy basic indicators, Check Point is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

betterU Education Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days betterU Education Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BetterU Education is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Check Point and BetterU Education

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

The idea behind Check Point Software and betterU Education Corp 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.