Correlation Between Check Point and Altria
Can any of the company-specific risk be diversified away by investing in both Check Point and Altria 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 Altria 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 Altria Group, you can compare the effects of market volatilities on Check Point and Altria 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 Altria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Altria.
Diversification Opportunities for Check Point and Altria
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Check and Altria is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Altria Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altria Group 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 Altria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altria Group has no effect on the direction of Check Point i.e., Check Point and Altria go up and down completely randomly.
Pair Corralation between Check Point and Altria
Assuming the 90 days trading horizon Check Point Software is expected to generate 0.51 times more return on investment than Altria. However, Check Point Software is 1.95 times less risky than Altria. It trades about -0.07 of its potential returns per unit of risk. Altria Group is currently generating about -0.34 per unit of risk. If you would invest 58,754 in Check Point Software on October 28, 2024 and sell it today you would lose (480.00) from holding Check Point Software or give up 0.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Check Point Software vs. Altria Group
Performance |
| Timeline |
| Check Point Software |
| Altria Group |
Check Point and Altria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Altria
The main advantage of trading using opposite Check Point and Altria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Altria 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 Altria will offset losses from the drop in Altria's long position.| Check Point vs. Metalurgica Gerdau SA | Check Point vs. ON Semiconductor | Check Point vs. Melco Resorts Entertainment | Check Point vs. Caesars Entertainment, |
| Altria vs. Check Point Software | Altria vs. Guidewire Software, | Altria vs. Public Storage | Altria vs. Westinghouse Air Brake |
Check out your portfolio center.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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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