Correlation Between Peak Resources and Check Point

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

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

Diversification Opportunities for Peak Resources and Check Point

0.28

Correlation Coefficient

Peak Resources  Check Point

Modest diversification

The 3 months correlation between Peak and Check is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Peak Resources Limited 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 Peak Resources 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 Peak Resources Limited 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 Peak Resources i.e., Peak Resources and Check Point go up and down completely randomly.

Pair Corralation between Peak Resources and Check Point

Assuming the 90 days horizon Peak Resources Limited is expected to under-perform the Check Point. In addition to that, Peak Resources is 9.5 times more volatile than Check Point Software. It trades about -0.09 of its total potential returns per unit of risk. Check Point Software is currently generating about 0.39 per unit of volatility. If you would invest  15,655  in Check Point Software on September 4, 2024 and sell it today you would earn a total of  2,015  from holding Check Point Software or generate 12.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Peak Resources Limited  vs.  Check Point Software

Peak Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peak Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Peak Resources and Check Point

The main advantage of trading using opposite Peak Resources and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peak Resources 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 Peak Resources Limited 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..