Correlation Between Check Point and Compagnie

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

Diversification Opportunities for Check Point and Compagnie

0.23

Correlation Coefficient

Check Point  Compagnie

Modest diversification

The 3 months correlation between Check and Compagnie is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Compagnie de Saint Gobain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de Saint 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 Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie de Saint has no effect on the direction of Check Point i.e., Check Point and Compagnie go up and down completely randomly.

Pair Corralation between Check Point and Compagnie

Assuming the 90 days trading horizon Check Point is expected to generate 1.66 times less return on investment than Compagnie. But when comparing it to its historical volatility, Check Point Software is 1.68 times less risky than Compagnie. It trades about 0.1 of its potential returns per unit of risk. Compagnie de Saint Gobain is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  8,813  in Compagnie de Saint Gobain on April 23, 2025 and sell it today you would earn a total of  1,257  from holding Compagnie de Saint Gobain or generate 14.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Check Point Software  vs.  Compagnie de Saint Gobain

Check Point Software

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Check Point Software are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Check Point may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Compagnie de Saint

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie de Saint Gobain are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Compagnie exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Check Point and Compagnie

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

The idea behind Check Point Software and Compagnie de Saint Gobain 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.