Correlation Between PROSIEBENSAT1 MEDIADR4 and Philip Morris
Can any of the company-specific risk be diversified away by investing in both PROSIEBENSAT1 MEDIADR4 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 PROSIEBENSAT1 MEDIADR4 and Philip Morris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROSIEBENSAT1 MEDIADR4 and Philip Morris International, you can compare the effects of market volatilities on PROSIEBENSAT1 MEDIADR4 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 PROSIEBENSAT1 MEDIADR4 with a short position of Philip Morris. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROSIEBENSAT1 MEDIADR4 and Philip Morris.
Diversification Opportunities for PROSIEBENSAT1 MEDIADR4 and Philip Morris
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PROSIEBENSAT1 and Philip is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding PROSIEBENSAT1 MEDIADR4 and Philip Morris International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philip Morris Intern and PROSIEBENSAT1 MEDIADR4 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 PROSIEBENSAT1 MEDIADR4 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 Intern has no effect on the direction of PROSIEBENSAT1 MEDIADR4 i.e., PROSIEBENSAT1 MEDIADR4 and Philip Morris go up and down completely randomly.
Pair Corralation between PROSIEBENSAT1 MEDIADR4 and Philip Morris
Assuming the 90 days trading horizon PROSIEBENSAT1 MEDIADR4 is expected to generate 2.29 times more return on investment than Philip Morris. However, PROSIEBENSAT1 MEDIADR4 is 2.29 times more volatile than Philip Morris International. It trades about 0.07 of its potential returns per unit of risk. Philip Morris International is currently generating about 0.07 per unit of risk. If you would invest 121.00 in PROSIEBENSAT1 MEDIADR4 on October 25, 2024 and sell it today you would earn a total of 3.00 from holding PROSIEBENSAT1 MEDIADR4 or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PROSIEBENSAT1 MEDIADR4 vs. Philip Morris International
Performance |
| Timeline |
| PROSIEBENSAT1 MEDIADR4 |
| Philip Morris Intern |
PROSIEBENSAT1 MEDIADR4 and Philip Morris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROSIEBENSAT1 MEDIADR4 and Philip Morris
The main advantage of trading using opposite PROSIEBENSAT1 MEDIADR4 and Philip Morris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROSIEBENSAT1 MEDIADR4 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.| PROSIEBENSAT1 MEDIADR4 vs. Apple Inc | PROSIEBENSAT1 MEDIADR4 vs. Apple Inc | PROSIEBENSAT1 MEDIADR4 vs. Apple Inc | PROSIEBENSAT1 MEDIADR4 vs. Apple Inc |
| Philip Morris vs. PROSIEBENSAT1 MEDIADR4 | Philip Morris vs. PARKEN Sport Entertainment | Philip Morris vs. Live Nation Entertainment | Philip Morris vs. REMEDY ENTERTAINMENT OYJ |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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