Correlation Between Philip Morris and China Aircraft
Can any of the company-specific risk be diversified away by investing in both Philip Morris and China Aircraft 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 China Aircraft 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 China Aircraft Leasing, you can compare the effects of market volatilities on Philip Morris and China Aircraft 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 China Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philip Morris and China Aircraft.
Diversification Opportunities for Philip Morris and China Aircraft
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Philip and China is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Philip Morris International and China Aircraft Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aircraft Leasing 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 China Aircraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aircraft Leasing has no effect on the direction of Philip Morris i.e., Philip Morris and China Aircraft go up and down completely randomly.
Pair Corralation between Philip Morris and China Aircraft
If you would invest 12,422 in Philip Morris International on September 13, 2024 and sell it today you would earn a total of 260.00 from holding Philip Morris International or generate 2.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Philip Morris International vs. China Aircraft Leasing
Performance |
| Timeline |
| Philip Morris Intern |
| China Aircraft Leasing |
Philip Morris and China Aircraft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philip Morris and China Aircraft
The main advantage of trading using opposite Philip Morris and China Aircraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philip Morris position performs unexpectedly, China Aircraft 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 China Aircraft will offset losses from the drop in China Aircraft's long position.| Philip Morris vs. Turning Point Brands | Philip Morris vs. Imperial Brands PLC | Philip Morris vs. Kaival Brands Innovations | Philip Morris vs. PT Hanjaya Mandala |
| China Aircraft vs. BRP Inc | China Aircraft vs. Genfit | China Aircraft vs. Hasbro Inc | China Aircraft vs. JD Sports Fashion |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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