Correlation Between Philip Morris and ABNANV

Can any of the company-specific risk be diversified away by investing in both Philip Morris and ABNANV 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 ABNANV 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 ABNANV 48 18 APR 26, you can compare the effects of market volatilities on Philip Morris and ABNANV 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 ABNANV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philip Morris and ABNANV.

Diversification Opportunities for Philip Morris and ABNANV

0.35

Correlation Coefficient

Philip Morris  ABNANV

Weak diversification

The 3 months correlation between Philip and ABNANV is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Philip Morris International and ABNANV 48 18 APR 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABNANV 48 18 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 ABNANV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABNANV 48 18 has no effect on the direction of Philip Morris i.e., Philip Morris and ABNANV go up and down completely randomly.

Pair Corralation between Philip Morris and ABNANV

Allowing for the 90-day total investment horizon Philip Morris International is expected to generate 0.35 times more return on investment than ABNANV. However, Philip Morris International is 2.9 times less risky than ABNANV. It trades about -0.19 of its potential returns per unit of risk. ABNANV 48 18 APR 26 is currently generating about -0.1 per unit of risk. If you would invest  12,387  in Philip Morris International on July 13, 2024 and sell it today you would lose (448.00) from holding Philip Morris International or give up 3.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	56.52%
Values	Daily Returns

Philip Morris International  vs.  ABNANV 48 18 APR 26

Philip Morris Intern

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Philip Morris International are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent primary indicators, Philip Morris displayed solid returns over the last few months and may actually be approaching a breakup point.

ABNANV 48 18

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ABNANV 48 18 APR 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for ABNANV 48 18 APR 26 investors.

Pair Trading with Philip Morris and ABNANV

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

The idea behind Philip Morris International and ABNANV 48 18 APR 26 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.