Correlation Between Prabos Plus and Philip Morris
Can any of the company-specific risk be diversified away by investing in both Prabos Plus 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 Prabos Plus and Philip Morris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prabos Plus as and Philip Morris CR, you can compare the effects of market volatilities on Prabos Plus 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 Prabos Plus with a short position of Philip Morris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prabos Plus and Philip Morris.
Diversification Opportunities for Prabos Plus and Philip Morris
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Prabos and Philip is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Prabos Plus as 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 Prabos Plus 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 Prabos Plus as 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 Prabos Plus i.e., Prabos Plus and Philip Morris go up and down completely randomly.
Pair Corralation between Prabos Plus and Philip Morris
Assuming the 90 days trading horizon Prabos Plus as is expected to generate 3.13 times more return on investment than Philip Morris. However, Prabos Plus is 3.13 times more volatile than Philip Morris CR. It trades about 0.03 of its potential returns per unit of risk. Philip Morris CR is currently generating about 0.03 per unit of risk. If you would invest 21,000 in Prabos Plus as on August 24, 2024 and sell it today you would earn a total of 6,000 from holding Prabos Plus as or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prabos Plus as vs. Philip Morris CR
Performance |
| Timeline |
| Prabos Plus as |
| Philip Morris CR |
Prabos Plus and Philip Morris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prabos Plus and Philip Morris
The main advantage of trading using opposite Prabos Plus and Philip Morris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prabos Plus 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.| Prabos Plus vs. Volkswagen AG | Prabos Plus vs. GEVORKYAN as | Prabos Plus vs. Philip Morris CR | Prabos Plus vs. Nokia Oyj |
| Philip Morris vs. Cez AS | Philip Morris vs. HARDWARIO as | Philip Morris vs. Prabos Plus as | Philip Morris vs. Kofola CeskoSlovensko 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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