Correlation Between Philip Morris and Yatsen Holding

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

Diversification Opportunities for Philip Morris and Yatsen Holding

0.35

Correlation Coefficient

Philip Morris  Yatsen Holding

Weak diversification

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

Pair Corralation between Philip Morris and Yatsen Holding

Allowing for the 90-day total investment horizon Philip Morris International is expected to under-perform the Yatsen Holding. But the stock apears to be less risky and, when comparing its historical volatility, Philip Morris International is 3.2 times less risky than Yatsen Holding. The stock trades about -0.06 of its potential returns per unit of risk. The Yatsen Holding is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  430.00  in Yatsen Holding on May 7, 2025 and sell it today you would earn a total of  481.00  from holding Yatsen Holding or generate 111.86% return on investment over 90 days.

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

Philip Morris International  vs.  Yatsen Holding

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.

Yatsen Holding

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Yatsen Holding are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Yatsen Holding reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Philip Morris and Yatsen Holding

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

The idea behind Philip Morris International and Yatsen Holding 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.