Correlation Between Check Point and Flex

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

Diversification Opportunities for Check Point and Flex

0.17

Correlation Coefficient

Check Point  Flex

Average diversification

The 3 months correlation between Check and Flex is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Flex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flex 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 Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flex has no effect on the direction of Check Point i.e., Check Point and Flex go up and down completely randomly.

Pair Corralation between Check Point and Flex

Given the investment horizon of 90 days Check Point Software is expected to under-perform the Flex. In addition to that, Check Point is 1.02 times more volatile than Flex. It trades about -0.08 of its total potential returns per unit of risk. Flex is currently generating about 0.19 per unit of volatility. If you would invest  5,049  in Flex on July 27, 2025 and sell it today you would earn a total of  1,379  from holding Flex or generate 27.31% return on investment over 90 days.

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

Check Point Software  vs.  Flex

Check Point Software

Risk-Adjusted Performance

Weakest

Over the last 90 days Check Point Software has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest abnormal performance, the Stock's forward-looking signals remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Flex

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flex are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting technical and fundamental indicators, Flex showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Check Point and Flex

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

The idea behind Check Point Software and Flex 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.