Correlation Between Check Point and HNI

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

Diversification Opportunities for Check Point and HNI

0.0

Correlation Coefficient

Check Point  HNI

Pay attention - limited upside

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

Pair Corralation between Check Point and HNI

If you would invest  0.00  in HNI Corporation on September 3, 2024 and sell it today you would earn a total of  0.00  from holding HNI Corporation or generate 0.0% return on investment over 90 days.

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

Check Point Software  vs.  HNI 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 current stock price disarray, may contribute to short-term losses for the investors.

HNI Corporation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HNI Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, HNI is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Check Point and HNI

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

The idea behind Check Point Software and HNI Corporation 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.