Correlation Between FEMALE HEALTH and Check Point
Can any of the company-specific risk be diversified away by investing in both FEMALE HEALTH 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 FEMALE HEALTH and Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FEMALE HEALTH and Check Point Software, you can compare the effects of market volatilities on FEMALE HEALTH 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 FEMALE HEALTH with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and Check Point.
Diversification Opportunities for FEMALE HEALTH and Check Point
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FEMALE and Check is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH i.e., FEMALE HEALTH and Check Point go up and down completely randomly.
Pair Corralation between FEMALE HEALTH and Check Point
Assuming the 90 days trading horizon FEMALE HEALTH is expected to generate 2.07 times more return on investment than Check Point. However, FEMALE HEALTH is 2.07 times more volatile than Check Point Software. It trades about 0.03 of its potential returns per unit of risk. Check Point Software is currently generating about -0.02 per unit of risk. If you would invest 77.00 in FEMALE HEALTH on October 21, 2024 and sell it today you would earn a total of 1.00 from holding FEMALE HEALTH or generate 1.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
FEMALE HEALTH vs. Check Point Software
Performance |
Timeline |
FEMALE HEALTH |
Check Point Software |
FEMALE HEALTH and Check Point Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FEMALE HEALTH and Check Point
The main advantage of trading using opposite FEMALE HEALTH and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEMALE HEALTH 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.FEMALE HEALTH vs. Wayside Technology Group | ||
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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