Correlation Between Photon Energy and Philip Morris
Can any of the company-specific risk be diversified away by investing in both Photon Energy 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 Photon Energy and Philip Morris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Photon Energy NV and Philip Morris CR, you can compare the effects of market volatilities on Photon Energy 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 Photon Energy with a short position of Philip Morris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Photon Energy and Philip Morris.
Diversification Opportunities for Photon Energy and Philip Morris
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Photon and Philip is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Photon Energy NV and Philip Morris CR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philip Morris CR and Photon Energy 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 Photon Energy NV 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 CR has no effect on the direction of Photon Energy i.e., Photon Energy and Philip Morris go up and down completely randomly.
Pair Corralation between Photon Energy and Philip Morris
Assuming the 90 days trading horizon Photon Energy NV is expected to under-perform the Philip Morris. In addition to that, Photon Energy is 5.95 times more volatile than Philip Morris CR. It trades about -0.22 of its total potential returns per unit of risk. Philip Morris CR is currently generating about -0.02 per unit of volatility. If you would invest 1,624,000 in Philip Morris CR on September 1, 2024 and sell it today you would lose (4,000) from holding Philip Morris CR or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Photon Energy NV vs. Philip Morris CR
Performance |
| Timeline |
| Photon Energy NV |
| Philip Morris CR |
Photon Energy and Philip Morris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Photon Energy and Philip Morris
The main advantage of trading using opposite Photon Energy and Philip Morris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photon Energy 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.| Photon Energy vs. Vienna Insurance Group | Photon Energy vs. UNIQA Insurance Group | Photon Energy vs. Moneta Money Bank |
| Philip Morris vs. Cez AS | Philip Morris vs. MT 1997 AS | Philip Morris vs. Kofola CeskoSlovensko as | Philip Morris vs. HARDWARIO as |
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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