Correlation Between Fidelity National and Check Point

Can any of the company-specific risk be diversified away by investing in both Fidelity National 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 Fidelity National and Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fidelity National Information and Check Point Software, you can compare the effects of market volatilities on Fidelity National 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 Fidelity National with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Check Point.

Diversification Opportunities for Fidelity National and Check Point

0.01

Correlation Coefficient

Fidelity National  Check Point

Significant diversification

The 3 months correlation between Fidelity and Check is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information 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 Fidelity National 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 Fidelity National Information 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 Fidelity National i.e., Fidelity National and Check Point go up and down completely randomly.

Pair Corralation between Fidelity National and Check Point

Assuming the 90 days trading horizon Fidelity National is expected to generate 1.5 times less return on investment than Check Point. In addition to that, Fidelity National is 1.15 times more volatile than Check Point Software. It trades about 0.04 of its total potential returns per unit of risk. Check Point Software is currently generating about 0.07 per unit of volatility. If you would invest  11,552  in Check Point Software on October 4, 2024 and sell it today you would earn a total of  6,333  from holding Check Point Software or generate 54.82% return on investment over 90 days.

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

Fidelity National Information  vs.  Check Point Software

Fidelity National

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity National Information are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Fidelity National is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Check Point Software

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Check Point Software are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Fidelity National and Check Point

The main advantage of trading using opposite Fidelity National and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National 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.

The idea behind Fidelity National Information and Check Point Software 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.