Correlation Between Check Point and Itaconix Plc

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

Diversification Opportunities for Check Point and Itaconix Plc

0.09

Correlation Coefficient

Check Point  Itaconix Plc

Significant diversification

The 3 months correlation between Check and Itaconix is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Itaconix plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itaconix plc 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 Itaconix Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itaconix plc has no effect on the direction of Check Point i.e., Check Point and Itaconix Plc go up and down completely randomly.

Pair Corralation between Check Point and Itaconix Plc

Assuming the 90 days trading horizon Check Point is expected to generate 3.47 times less return on investment than Itaconix Plc. But when comparing it to its historical volatility, Check Point Software is 1.96 times less risky than Itaconix Plc. It trades about 0.1 of its potential returns per unit of risk. Itaconix plc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  10,000  in Itaconix plc on April 23, 2025 and sell it today you would earn a total of  3,400  from holding Itaconix plc or generate 34.0% return on investment over 90 days.

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

Check Point Software  vs.  Itaconix plc

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.

Itaconix plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Itaconix plc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Itaconix Plc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Check Point and Itaconix Plc

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

The idea behind Check Point Software and Itaconix plc 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.