Correlation Between Utilities Select and Check Point

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

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

Diversification Opportunities for Utilities Select and Check Point

0.14

Correlation Coefficient

Utilities Select  Check Point

Average diversification

The 3 months correlation between Utilities and Check is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Utilities Select Sector 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 Utilities Select 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 Utilities Select Sector 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 Utilities Select i.e., Utilities Select and Check Point go up and down completely randomly.

Pair Corralation between Utilities Select and Check Point

Considering the 90-day investment horizon Utilities Select Sector is expected to generate 0.54 times more return on investment than Check Point. However, Utilities Select Sector is 1.86 times less risky than Check Point. It trades about 0.11 of its potential returns per unit of risk. Check Point Software is currently generating about 0.06 per unit of risk. If you would invest  8,523  in Utilities Select Sector on August 1, 2025 and sell it today you would earn a total of  449.00  from holding Utilities Select Sector or generate 5.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Utilities Select Sector  vs.  Check Point Software

Utilities Select Sector

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Utilities Select Sector are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Utilities Select is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Check Point Software

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Check Point Software are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward-looking signals, Check Point is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Utilities Select and Check Point

The main advantage of trading using opposite Utilities Select and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Utilities Select 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 Utilities Select Sector 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.