Correlation Between Philip Morris and PT Gudang
Can any of the company-specific risk be diversified away by investing in both Philip Morris and PT Gudang 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 Philip Morris and PT Gudang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Philip Morris International and PT Gudang Garam, you can compare the effects of market volatilities on Philip Morris and PT Gudang 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 Philip Morris with a short position of PT Gudang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philip Morris and PT Gudang.
Diversification Opportunities for Philip Morris and PT Gudang
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Philip and GGG is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Philip Morris International and PT Gudang Garam in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Gudang Garam and Philip Morris 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 Philip Morris International are associated (or correlated) with PT Gudang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Gudang Garam has no effect on the direction of Philip Morris i.e., Philip Morris and PT Gudang go up and down completely randomly.
Pair Corralation between Philip Morris and PT Gudang
Assuming the 90 days trading horizon Philip Morris International is expected to generate 0.26 times more return on investment than PT Gudang. However, Philip Morris International is 3.84 times less risky than PT Gudang. It trades about 0.1 of its potential returns per unit of risk. PT Gudang Garam is currently generating about -0.01 per unit of risk. If you would invest 8,332 in Philip Morris International on November 29, 2024 and sell it today you would earn a total of 6,522 from holding Philip Morris International or generate 78.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Philip Morris International vs. PT Gudang Garam
Performance |
| Timeline |
| Philip Morris Intern |
| PT Gudang Garam |
Philip Morris and PT Gudang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philip Morris and PT Gudang
The main advantage of trading using opposite Philip Morris and PT Gudang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philip Morris position performs unexpectedly, PT Gudang 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 PT Gudang will offset losses from the drop in PT Gudang's long position.| Philip Morris vs. Air Transport Services | Philip Morris vs. Yuexiu Transport Infrastructure | Philip Morris vs. SIERRA METALS | Philip Morris vs. Nippon Light Metal |
| PT Gudang vs. PLANT VEDA FOODS | PT Gudang vs. Micron Technology | PT Gudang vs. Computer And Technologies | PT Gudang vs. PATTIES FOODS |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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