Correlation Between 22nd Century and Philip Morris
Can any of the company-specific risk be diversified away by investing in both 22nd Century 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 22nd Century and Philip Morris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 22nd Century Group and Philip Morris International, you can compare the effects of market volatilities on 22nd Century 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 22nd Century with a short position of Philip Morris. Check out your portfolio center. Please also check ongoing floating volatility patterns of 22nd Century and Philip Morris.
Diversification Opportunities for 22nd Century and Philip Morris
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 22nd and Philip is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding 22nd Century Group 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 22nd Century 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 22nd Century Group 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 22nd Century i.e., 22nd Century and Philip Morris go up and down completely randomly.
Pair Corralation between 22nd Century and Philip Morris
Given the investment horizon of 90 days 22nd Century Group is expected to under-perform the Philip Morris. In addition to that, 22nd Century is 9.48 times more volatile than Philip Morris International. It trades about -0.08 of its total potential returns per unit of risk. Philip Morris International is currently generating about 0.13 per unit of volatility. If you would invest 8,941 in Philip Morris International on August 24, 2024 and sell it today you would earn a total of 4,149 from holding Philip Morris International or generate 46.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
22nd Century Group vs. Philip Morris International
Performance |
| Timeline |
| 22nd Century Group |
| Philip Morris Intern |
22nd Century and Philip Morris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 22nd Century and Philip Morris
The main advantage of trading using opposite 22nd Century and Philip Morris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 22nd Century 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.| 22nd Century vs. Turning Point Brands | 22nd Century vs. Green Globe International | 22nd Century vs. Imperial Brands PLC | 22nd Century vs. Kaival Brands Innovations |
| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |