Correlation Between Check Point and Zscaler

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

Diversification Opportunities for Check Point and Zscaler

0.15

Correlation Coefficient

Check Point  Zscaler

Average diversification

The 3 months correlation between Check and Zscaler is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Zscaler in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zscaler 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 Zscaler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zscaler has no effect on the direction of Check Point i.e., Check Point and Zscaler go up and down completely randomly.

Pair Corralation between Check Point and Zscaler

Given the investment horizon of 90 days Check Point Software is expected to under-perform the Zscaler. In addition to that, Check Point is 1.11 times more volatile than Zscaler. It trades about -0.08 of its total potential returns per unit of risk. Zscaler is currently generating about 0.1 per unit of volatility. If you would invest  24,592  in Zscaler on May 15, 2025 and sell it today you would earn a total of  3,185  from holding Zscaler or generate 12.95% 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.  Zscaler

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 weak 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.

Zscaler

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Zscaler are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Zscaler unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Check Point and Zscaler

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

The idea behind Check Point Software and Zscaler 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.