Correlation Between Procter Gamble and Check Point
Can any of the company-specific risk be diversified away by investing in both Procter Gamble 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 Procter Gamble and Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Check Point Software, you can compare the effects of market volatilities on Procter Gamble 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 Procter Gamble with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Check Point.
Diversification Opportunities for Procter Gamble and Check Point
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Procter and Check is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble 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 Procter Gamble 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 Procter Gamble 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 Procter Gamble i.e., Procter Gamble and Check Point go up and down completely randomly.
Pair Corralation between Procter Gamble and Check Point
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 1.79 times less return on investment than Check Point. But when comparing it to its historical volatility, Procter Gamble is 1.53 times less risky than Check Point. It trades about 0.06 of its potential returns per unit of risk. Check Point Software is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 13,385 in Check Point Software on August 27, 2024 and sell it today you would earn a total of 4,790 from holding Check Point Software or generate 35.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Check Point Software
Performance |
| Timeline |
| Procter Gamble |
| Check Point Software |
Procter Gamble and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Check Point
The main advantage of trading using opposite Procter Gamble and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble 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.| Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Estee Lauder Companies | Procter Gamble vs. ELF Beauty | Procter Gamble vs. Coty Inc |
| Check Point vs. GigaCloud Technology Class | Check Point vs. Arqit Quantum | Check Point vs. Cemtrex | Check Point vs. Paysafe |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Stocks Directory Find actively traded stocks across global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |