Correlation Between NORSK and Philip Morris
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By analyzing existing cross correlation between NORSK HYDRO A and Philip Morris International, you can compare the effects of market volatilities on NORSK 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 NORSK with a short position of Philip Morris. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORSK and Philip Morris.
Diversification Opportunities for NORSK and Philip Morris
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NORSK and Philip is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding NORSK HYDRO A 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 NORSK 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 NORSK HYDRO A 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 NORSK i.e., NORSK and Philip Morris go up and down completely randomly.
Pair Corralation between NORSK and Philip Morris
Assuming the 90 days trading horizon NORSK HYDRO A is expected to under-perform the Philip Morris. But the bond apears to be less risky and, when comparing its historical volatility, NORSK HYDRO A is 1.78 times less risky than Philip Morris. The bond trades about -0.01 of its potential returns per unit of risk. The Philip Morris International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 9,190 in Philip Morris International on August 29, 2024 and sell it today you would earn a total of 4,038 from holding Philip Morris International or generate 43.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 60.61% |
| Values | Daily Returns |
NORSK HYDRO A vs. Philip Morris International
Performance |
| Timeline |
| NORSK HYDRO A |
| Philip Morris Intern |
NORSK and Philip Morris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORSK and Philip Morris
The main advantage of trading using opposite NORSK and Philip Morris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORSK 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.| NORSK vs. Skechers USA | NORSK vs. Lion One Metals | NORSK vs. Citi Trends | NORSK vs. Inflection Point Acquisition |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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