Correlation Between Philip Morris and Ihuman
Can any of the company-specific risk be diversified away by investing in both Philip Morris and Ihuman 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 Ihuman 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 Ihuman Inc, you can compare the effects of market volatilities on Philip Morris and Ihuman 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 Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philip Morris and Ihuman.
Diversification Opportunities for Philip Morris and Ihuman
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Philip and Ihuman is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Philip Morris International and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc 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 Ihuman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihuman Inc has no effect on the direction of Philip Morris i.e., Philip Morris and Ihuman go up and down completely randomly.
Pair Corralation between Philip Morris and Ihuman
Allowing for the 90-day total investment horizon Philip Morris International is expected to generate 1.11 times more return on investment than Ihuman. However, Philip Morris is 1.11 times more volatile than Ihuman Inc. It trades about 0.34 of its potential returns per unit of risk. Ihuman Inc is currently generating about 0.11 per unit of risk. If you would invest 12,186 in Philip Morris International on November 9, 2024 and sell it today you would earn a total of 2,346 from holding Philip Morris International or generate 19.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Philip Morris International vs. Ihuman Inc
Performance |
| Timeline |
| Philip Morris Intern |
| Ihuman Inc |
Philip Morris and Ihuman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philip Morris and Ihuman
The main advantage of trading using opposite Philip Morris and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philip Morris position performs unexpectedly, Ihuman 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 Ihuman will offset losses from the drop in Ihuman's long position.| Philip Morris vs. British American Tobacco | Philip Morris vs. Universal | Philip Morris vs. Imperial Brands PLC | Philip Morris vs. Altria Group |
| Ihuman vs. Boqii Holding Limited | Ihuman vs. Lixiang Education Holding | Ihuman vs. Huize Holding | Ihuman vs. Kuke Music Holding |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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