Correlation Between ZeroFox Holdings and Check Point

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

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

Diversification Opportunities for ZeroFox Holdings and Check Point

-0.74

Correlation Coefficient

ZeroFox Holdings  Check Point

Pay attention - limited upside

The 3 months correlation between ZeroFox and Check is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding ZeroFox Holdings 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 ZeroFox Holdings 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 ZeroFox Holdings 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 ZeroFox Holdings i.e., ZeroFox Holdings and Check Point go up and down completely randomly.

Pair Corralation between ZeroFox Holdings and Check Point

Given the investment horizon of 90 days ZeroFox Holdings is expected to generate 0.5 times more return on investment than Check Point. However, ZeroFox Holdings is 2.02 times less risky than Check Point. It trades about 0.0 of its potential returns per unit of risk. Check Point Software is currently generating about -0.02 per unit of risk. If you would invest  114.00  in ZeroFox Holdings on February 29, 2024 and sell it today you would earn a total of  0.00  from holding ZeroFox Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	57.14%
Values	Daily Returns

ZeroFox Holdings  vs.  Check Point Software

ZeroFox Holdings

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days ZeroFox Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, ZeroFox Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Check Point Software

Risk-Adjusted Performance

0 of 100

Very Weak

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.

Pair Trading with ZeroFox Holdings and Check Point

The main advantage of trading using opposite ZeroFox Holdings and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZeroFox Holdings 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 ZeroFox Holdings 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.