Correlation Between Imperial Brands and Pyxus International
Can any of the company-specific risk be diversified away by investing in both Imperial Brands and Pyxus International 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 Imperial Brands and Pyxus International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imperial Brands PLC and Pyxus International, you can compare the effects of market volatilities on Imperial Brands and Pyxus International 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 Imperial Brands with a short position of Pyxus International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Brands and Pyxus International.
Diversification Opportunities for Imperial Brands and Pyxus International
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Imperial and Pyxus is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Brands PLC and Pyxus International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxus International and Imperial Brands 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 Imperial Brands PLC are associated (or correlated) with Pyxus International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pyxus International has no effect on the direction of Imperial Brands i.e., Imperial Brands and Pyxus International go up and down completely randomly.
Pair Corralation between Imperial Brands and Pyxus International
Assuming the 90 days horizon Imperial Brands PLC is expected to generate 0.42 times more return on investment than Pyxus International. However, Imperial Brands PLC is 2.38 times less risky than Pyxus International. It trades about 0.24 of its potential returns per unit of risk. Pyxus International is currently generating about -0.01 per unit of risk. If you would invest 3,000 in Imperial Brands PLC on September 1, 2024 and sell it today you would earn a total of 415.00 from holding Imperial Brands PLC or generate 13.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imperial Brands PLC vs. Pyxus International
Performance |
| Timeline |
| Imperial Brands PLC |
| Pyxus International |
Imperial Brands and Pyxus International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imperial Brands and Pyxus International
The main advantage of trading using opposite Imperial Brands and Pyxus International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Brands position performs unexpectedly, Pyxus International 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 Pyxus International will offset losses from the drop in Pyxus International's long position.| Imperial Brands vs. Imperial Brands PLC | Imperial Brands vs. Turning Point Brands | Imperial Brands vs. Universal | Imperial Brands vs. Japan Tobacco ADR |
| Pyxus International vs. PT Hanjaya Mandala | Pyxus International vs. Greenlane Holdings | Pyxus International vs. 22nd Century Group | Pyxus International vs. Japan Tobacco ADR |
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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