Correlation Between Omni Financial and Philip Morris

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Can any of the company-specific risk be diversified away by investing in both Omni Financial 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 Omni Financial and Philip Morris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omni Financial Services and Philip Morris International, you can compare the effects of market volatilities on Omni Financial 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 Omni Financial with a short position of Philip Morris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omni Financial and Philip Morris.

Diversification Opportunities for Omni Financial and Philip Morris

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Omni and Philip is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Omni Financial Services 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 Omni Financial 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 Omni Financial Services 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 Omni Financial i.e., Omni Financial and Philip Morris go up and down completely randomly.

Pair Corralation between Omni Financial and Philip Morris

If you would invest  9,230  in Philip Morris International on September 20, 2024 and sell it today you would earn a total of  3,225  from holding Philip Morris International or generate 34.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy26.46%
ValuesDaily Returns

Omni Financial Services  vs.  Philip Morris International

 Performance 
       Timeline  
Omni Financial Services 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Omni Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Omni Financial is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.
Philip Morris Intern 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Philip Morris International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Philip Morris is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Omni Financial and Philip Morris Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Omni Financial and Philip Morris

The main advantage of trading using opposite Omni Financial and Philip Morris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omni Financial 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.
The idea behind Omni Financial Services and Philip Morris International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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