Correlation Between Kenon Holdings and Philip Morris
Can any of the company-specific risk be diversified away by investing in both Kenon Holdings and Philip Morris 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 Kenon Holdings and Philip Morris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kenon Holdings and Philip Morris International, you can compare the effects of market volatilities on Kenon Holdings and Philip Morris 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 Kenon Holdings with a short position of Philip Morris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kenon Holdings and Philip Morris.
Diversification Opportunities for Kenon Holdings and Philip Morris
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kenon and Philip is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Kenon Holdings and Philip Morris International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philip Morris Intern and Kenon Holdings 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 Kenon Holdings are associated (or correlated) with Philip Morris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Philip Morris Intern has no effect on the direction of Kenon Holdings i.e., Kenon Holdings and Philip Morris go up and down completely randomly.
Pair Corralation between Kenon Holdings and Philip Morris
Considering the 90-day investment horizon Kenon Holdings is expected to generate 1.47 times less return on investment than Philip Morris. In addition to that, Kenon Holdings is 1.87 times more volatile than Philip Morris International. It trades about 0.03 of its total potential returns per unit of risk. Philip Morris International is currently generating about 0.08 per unit of volatility. If you would invest 9,048 in Philip Morris International on August 24, 2024 and sell it today you would earn a total of 3,951 from holding Philip Morris International or generate 43.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kenon Holdings vs. Philip Morris International
Performance |
| Timeline |
| Kenon Holdings |
| Philip Morris Intern |
Kenon Holdings and Philip Morris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kenon Holdings and Philip Morris
The main advantage of trading using opposite Kenon Holdings and Philip Morris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kenon Holdings position performs unexpectedly, Philip Morris 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 Philip Morris will offset losses from the drop in Philip Morris' long position.| Kenon Holdings vs. Vistra Energy Corp | Kenon Holdings vs. Pampa Energia SA | Kenon Holdings vs. NRG Energy | Kenon Holdings vs. TransAlta Corp |
| Philip Morris vs. British American Tobacco | Philip Morris vs. Universal | Philip Morris vs. Imperial Brands PLC | Philip Morris vs. Altria Group |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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