Correlation Between Philip Morris and Virtus Investment

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

Diversification Opportunities for Philip Morris and Virtus Investment

-0.2

Correlation Coefficient

Philip Morris  Virtus Investment

Good diversification

The 3 months correlation between Philip and Virtus is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Philip Morris International and Virtus Investment Partners, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Investment 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 Virtus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Investment has no effect on the direction of Philip Morris i.e., Philip Morris and Virtus Investment go up and down completely randomly.

Pair Corralation between Philip Morris and Virtus Investment

Allowing for the 90-day total investment horizon Philip Morris International is expected to under-perform the Virtus Investment. But the stock apears to be less risky and, when comparing its historical volatility, Philip Morris International is 1.23 times less risky than Virtus Investment. The stock trades about -0.05 of its potential returns per unit of risk. The Virtus Investment Partners, is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  15,782  in Virtus Investment Partners, on May 6, 2025 and sell it today you would earn a total of  3,184  from holding Virtus Investment Partners, or generate 20.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Philip Morris International  vs.  Virtus Investment Partners,

Philip Morris Intern

Risk-Adjusted Performance

Very Weak

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.

Virtus Investment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Investment Partners, are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Virtus Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Philip Morris and Virtus Investment

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

The idea behind Philip Morris International and Virtus Investment Partners, 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.