Correlation Between Philip Morris and G Willi

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

Diversification Opportunities for Philip Morris and G Willi

0.63

Correlation Coefficient

Philip Morris  G Willi

Poor diversification

The 3 months correlation between Philip and WILC is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Philip Morris International and G Willi Food International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G Willi Food 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 G Willi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G Willi Food has no effect on the direction of Philip Morris i.e., Philip Morris and G Willi go up and down completely randomly.

Pair Corralation between Philip Morris and G Willi

Allowing for the 90-day total investment horizon Philip Morris International is expected to generate 1.45 times more return on investment than G Willi. However, Philip Morris is 1.45 times more volatile than G Willi Food International. It trades about 0.06 of its potential returns per unit of risk. G Willi Food International is currently generating about -0.04 per unit of risk. If you would invest  12,018  in Philip Morris International on August 10, 2024 and sell it today you would earn a total of  360.00  from holding Philip Morris International or generate 3.0% return on investment over 90 days.

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

Philip Morris International  vs.  G Willi Food International

Philip Morris Intern

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Philip Morris International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Philip Morris may actually be approaching a critical reversion point that can send shares even higher in December 2024.

G Willi Food

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in G Willi Food International are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent essential indicators, G Willi exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Philip Morris and G Willi

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

The idea behind Philip Morris International and G Willi Food International 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.