Correlation Between Philip Morris and Kofola CeskoSlovensko
Can any of the company-specific risk be diversified away by investing in both Philip Morris and Kofola CeskoSlovensko 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 Kofola CeskoSlovensko 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 Kofola CeskoSlovensko as, you can compare the effects of market volatilities on Philip Morris and Kofola CeskoSlovensko 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 Kofola CeskoSlovensko. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philip Morris and Kofola CeskoSlovensko.
Diversification Opportunities for Philip Morris and Kofola CeskoSlovensko
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Philip and Kofola is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Philip Morris CR and Kofola CeskoSlovensko as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kofola CeskoSlovensko 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 Kofola CeskoSlovensko. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kofola CeskoSlovensko has no effect on the direction of Philip Morris i.e., Philip Morris and Kofola CeskoSlovensko go up and down completely randomly.
Pair Corralation between Philip Morris and Kofola CeskoSlovensko
Assuming the 90 days trading horizon Philip Morris is expected to generate 4.36 times less return on investment than Kofola CeskoSlovensko. But when comparing it to its historical volatility, Philip Morris CR is 1.54 times less risky than Kofola CeskoSlovensko. It trades about 0.06 of its potential returns per unit of risk. Kofola CeskoSlovensko as is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 25,776 in Kofola CeskoSlovensko as on August 28, 2024 and sell it today you would earn a total of 12,424 from holding Kofola CeskoSlovensko as or generate 48.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Philip Morris CR vs. Kofola CeskoSlovensko as
Performance |
| Timeline |
| Philip Morris CR |
| Kofola CeskoSlovensko |
Philip Morris and Kofola CeskoSlovensko Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philip Morris and Kofola CeskoSlovensko
The main advantage of trading using opposite Philip Morris and Kofola CeskoSlovensko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philip Morris position performs unexpectedly, Kofola CeskoSlovensko 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 Kofola CeskoSlovensko will offset losses from the drop in Kofola CeskoSlovensko's long position.| Philip Morris vs. HARDWARIO as | Philip Morris vs. Prabos Plus as | Philip Morris vs. Kofola CeskoSlovensko as | Philip Morris vs. MT 1997 AS |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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