Correlation Between Sellas Life and Philip Morris
Can any of the company-specific risk be diversified away by investing in both Sellas Life 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 Sellas Life and Philip Morris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sellas Life Sciences and Philip Morris International, you can compare the effects of market volatilities on Sellas Life 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 Sellas Life with a short position of Philip Morris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sellas Life and Philip Morris.
Diversification Opportunities for Sellas Life and Philip Morris
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sellas and Philip is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences 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 Sellas Life 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 Sellas Life Sciences 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 Sellas Life i.e., Sellas Life and Philip Morris go up and down completely randomly.
Pair Corralation between Sellas Life and Philip Morris
Considering the 90-day investment horizon Sellas Life Sciences is expected to under-perform the Philip Morris. In addition to that, Sellas Life is 3.33 times more volatile than Philip Morris International. It trades about -0.5 of its total potential returns per unit of risk. Philip Morris International is currently generating about -0.06 per unit of volatility. If you would invest 12,859 in Philip Morris International on September 16, 2024 and sell it today you would lose (197.00) from holding Philip Morris International or give up 1.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sellas Life Sciences vs. Philip Morris International
Performance |
| Timeline |
| Sellas Life Sciences |
| Philip Morris Intern |
Sellas Life and Philip Morris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sellas Life and Philip Morris
The main advantage of trading using opposite Sellas Life and Philip Morris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sellas Life 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.| Sellas Life vs. Puma Biotechnology | Sellas Life vs. Iovance Biotherapeutics | Sellas Life vs. Zentalis Pharmaceuticals Llc | Sellas Life vs. Syndax Pharmaceuticals |
| Philip Morris vs. British American Tobacco | Philip Morris vs. Universal | Philip Morris vs. Imperial Brands PLC | Philip Morris vs. Altria Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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