Correlation Between Fevertree Drinks and Check Point

Can any of the company-specific risk be diversified away by investing in both Fevertree Drinks and Check Point 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 Fevertree Drinks and Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fevertree Drinks Plc and Check Point Software, you can compare the effects of market volatilities on Fevertree Drinks and Check Point 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 Fevertree Drinks with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fevertree Drinks and Check Point.

Diversification Opportunities for Fevertree Drinks and Check Point

0.52

Correlation Coefficient

Fevertree Drinks  Check Point

Very weak diversification

The 3 months correlation between Fevertree and Check is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Fevertree Drinks Plc and Check Point Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Point Software and Fevertree Drinks 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 Fevertree Drinks Plc are associated (or correlated) with Check Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Point Software has no effect on the direction of Fevertree Drinks i.e., Fevertree Drinks and Check Point go up and down completely randomly.

Pair Corralation between Fevertree Drinks and Check Point

Assuming the 90 days trading horizon Fevertree Drinks Plc is expected to generate 1.11 times more return on investment than Check Point. However, Fevertree Drinks is 1.11 times more volatile than Check Point Software. It trades about 0.17 of its potential returns per unit of risk. Check Point Software is currently generating about 0.1 per unit of risk. If you would invest  77,673  in Fevertree Drinks Plc on April 23, 2025 and sell it today you would earn a total of  13,727  from holding Fevertree Drinks Plc or generate 17.67% return on investment over 90 days.

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

Fevertree Drinks Plc  vs.  Check Point Software

Fevertree Drinks Plc

Risk-Adjusted Performance

Good

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

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.

Pair Trading with Fevertree Drinks and Check Point

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

The idea behind Fevertree Drinks Plc and Check Point Software 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.