Correlation Between Check Point and Delta Electronics

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

Diversification Opportunities for Check Point and Delta Electronics

0.36

Correlation Coefficient

Check Point  Delta Electronics

Weak diversification

The 3 months correlation between Check and Delta is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Delta Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Electronics Public 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 Delta Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Electronics Public has no effect on the direction of Check Point i.e., Check Point and Delta Electronics go up and down completely randomly.

Pair Corralation between Check Point and Delta Electronics

Assuming the 90 days trading horizon Check Point is expected to generate 15.79 times less return on investment than Delta Electronics. But when comparing it to its historical volatility, Check Point Software is 3.1 times less risky than Delta Electronics. It trades about 0.05 of its potential returns per unit of risk. Delta Electronics Public is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  193.00  in Delta Electronics Public on April 24, 2025 and sell it today you would earn a total of  159.00  from holding Delta Electronics Public or generate 82.38% return on investment over 90 days.

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

Check Point Software  vs.  Delta Electronics Public

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 very healthy basic indicators, Check Point is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Delta Electronics Public

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Electronics Public are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Delta Electronics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Check Point and Delta Electronics

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

The idea behind Check Point Software and Delta Electronics Public 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.