Correlation Between Philip Morris and MT 1997
Can any of the company-specific risk be diversified away by investing in both Philip Morris and MT 1997 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 MT 1997 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Philip Morris CR and MT 1997 AS, you can compare the effects of market volatilities on Philip Morris and MT 1997 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 MT 1997. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philip Morris and MT 1997.
Diversification Opportunities for Philip Morris and MT 1997
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Philip and KLIKY is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Philip Morris CR and MT 1997 AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MT 1997 AS 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 CR are associated (or correlated) with MT 1997. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MT 1997 AS has no effect on the direction of Philip Morris i.e., Philip Morris and MT 1997 go up and down completely randomly.
Pair Corralation between Philip Morris and MT 1997
Assuming the 90 days trading horizon Philip Morris CR is expected to generate 0.61 times more return on investment than MT 1997. However, Philip Morris CR is 1.65 times less risky than MT 1997. It trades about 0.03 of its potential returns per unit of risk. MT 1997 AS is currently generating about 0.0 per unit of risk. If you would invest 1,444,360 in Philip Morris CR on August 24, 2024 and sell it today you would earn a total of 171,640 from holding Philip Morris CR or generate 11.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Philip Morris CR vs. MT 1997 AS
Performance |
| Timeline |
| Philip Morris CR |
| MT 1997 AS |
Philip Morris and MT 1997 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philip Morris and MT 1997
The main advantage of trading using opposite Philip Morris and MT 1997 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philip Morris position performs unexpectedly, MT 1997 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 MT 1997 will offset losses from the drop in MT 1997's long position.| Philip Morris vs. Cez AS | Philip Morris vs. HARDWARIO as | Philip Morris vs. Prabos Plus as | Philip Morris vs. Kofola CeskoSlovensko as |
| MT 1997 vs. Volkswagen AG | MT 1997 vs. GEVORKYAN as | MT 1997 vs. Philip Morris CR | MT 1997 vs. Prabos Plus 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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