Correlation Between Check Point and Smarttech247 Group

Can any of the company-specific risk be diversified away by investing in both Check Point and Smarttech247 Group 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 Smarttech247 Group 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 Smarttech247 Group PLC, you can compare the effects of market volatilities on Check Point and Smarttech247 Group 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 Smarttech247 Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Smarttech247 Group.

Diversification Opportunities for Check Point and Smarttech247 Group

0.68

Correlation Coefficient

Check Point  Smarttech247 Group

Poor diversification

The 3 months correlation between Check and Smarttech247 is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Smarttech247 Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smarttech247 Group 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 Smarttech247 Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smarttech247 Group PLC has no effect on the direction of Check Point i.e., Check Point and Smarttech247 Group go up and down completely randomly.

Pair Corralation between Check Point and Smarttech247 Group

Assuming the 90 days trading horizon Check Point is expected to generate 5.11 times less return on investment than Smarttech247 Group. But when comparing it to its historical volatility, Check Point Software is 1.31 times less risky than Smarttech247 Group. It trades about 0.04 of its potential returns per unit of risk. Smarttech247 Group PLC is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  663.00  in Smarttech247 Group PLC on April 22, 2025 and sell it today you would earn a total of  137.00  from holding Smarttech247 Group PLC or generate 20.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Check Point Software  vs.  Smarttech247 Group PLC

Check Point Software

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Check Point Software are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Check Point is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Smarttech247 Group PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Smarttech247 Group PLC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Smarttech247 Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Check Point and Smarttech247 Group

The main advantage of trading using opposite Check Point and Smarttech247 Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Smarttech247 Group 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 Smarttech247 Group will offset losses from the drop in Smarttech247 Group's long position.

The idea behind Check Point Software and Smarttech247 Group 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.

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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.