Correlation Between Philip Morris and Weibo Corp
Can any of the company-specific risk be diversified away by investing in both Philip Morris and Weibo Corp 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 Weibo Corp 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 Weibo Corp, you can compare the effects of market volatilities on Philip Morris and Weibo Corp 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 Weibo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philip Morris and Weibo Corp.
Diversification Opportunities for Philip Morris and Weibo Corp
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Philip and Weibo is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Philip Morris International and Weibo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weibo Corp 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 Weibo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weibo Corp has no effect on the direction of Philip Morris i.e., Philip Morris and Weibo Corp go up and down completely randomly.
Pair Corralation between Philip Morris and Weibo Corp
Allowing for the 90-day total investment horizon Philip Morris is expected to generate 3.73 times less return on investment than Weibo Corp. But when comparing it to its historical volatility, Philip Morris International is 1.85 times less risky than Weibo Corp. It trades about 0.06 of its potential returns per unit of risk. Weibo Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 896.00 in Weibo Corp on September 2, 2024 and sell it today you would earn a total of 64.00 from holding Weibo Corp or generate 7.14% 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. Weibo Corp
Performance |
| Timeline |
| Philip Morris Intern |
| Weibo Corp |
Philip Morris and Weibo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philip Morris and Weibo Corp
The main advantage of trading using opposite Philip Morris and Weibo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philip Morris position performs unexpectedly, Weibo Corp 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 Weibo Corp will offset losses from the drop in Weibo Corp's long position.| Philip Morris vs. British American Tobacco | Philip Morris vs. Universal | Philip Morris vs. Imperial Brands PLC | Philip Morris vs. Altria Group |
| Weibo Corp vs. YY Inc Class | Weibo Corp vs. DouYu International Holdings | Weibo Corp vs. Tencent Music Entertainment | Weibo Corp vs. Autohome |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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