Correlation Between Philip Morris and Contextlogic

Can any of the company-specific risk be diversified away by investing in both Philip Morris and Contextlogic 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 Contextlogic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Philip Morris International and Contextlogic, you can compare the effects of market volatilities on Philip Morris and Contextlogic 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 Contextlogic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philip Morris and Contextlogic.

Diversification Opportunities for Philip Morris and Contextlogic

-0.09

Correlation Coefficient

Philip Morris  Contextlogic

Good diversification

The 3 months correlation between Philip and Contextlogic is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Philip Morris International and Contextlogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contextlogic 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 International are associated (or correlated) with Contextlogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contextlogic has no effect on the direction of Philip Morris i.e., Philip Morris and Contextlogic go up and down completely randomly.

Pair Corralation between Philip Morris and Contextlogic

Allowing for the 90-day total investment horizon Philip Morris International is expected to under-perform the Contextlogic. But the stock apears to be less risky and, when comparing its historical volatility, Philip Morris International is 2.56 times less risky than Contextlogic. The stock trades about -0.01 of its potential returns per unit of risk. The Contextlogic is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  738.00  in Contextlogic on May 8, 2025 and sell it today you would earn a total of  1.00  from holding Contextlogic or generate 0.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	50.0%
Values	Daily Returns

Philip Morris International  vs.  Contextlogic

Philip Morris Intern

Risk-Adjusted Performance

Weakest

Over the last 90 days Philip Morris International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Philip Morris is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Contextlogic

Risk-Adjusted Performance

Weak

Over the last 90 days Contextlogic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Contextlogic is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Philip Morris and Contextlogic

The main advantage of trading using opposite Philip Morris and Contextlogic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philip Morris position performs unexpectedly, Contextlogic 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 Contextlogic will offset losses from the drop in Contextlogic's long position.

The idea behind Philip Morris International and Contextlogic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.