Correlation Between Turning Point and 22nd Century

Can any of the company-specific risk be diversified away by investing in both Turning Point and 22nd Century 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 Turning Point and 22nd Century into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Turning Point Brands and 22nd Century Group, you can compare the effects of market volatilities on Turning Point and 22nd Century 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 Turning Point with a short position of 22nd Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and 22nd Century.

Diversification Opportunities for Turning Point and 22nd Century

0.67

Correlation Coefficient

Turning Point  22nd Century

Poor diversification

The 3 months correlation between Turning and 22nd is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands and 22nd Century Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 22nd Century Group and Turning Point 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 Turning Point Brands are associated (or correlated) with 22nd Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 22nd Century Group has no effect on the direction of Turning Point i.e., Turning Point and 22nd Century go up and down completely randomly.

Pair Corralation between Turning Point and 22nd Century

Considering the 90-day investment horizon Turning Point Brands is expected to generate 0.39 times more return on investment than 22nd Century. However, Turning Point Brands is 2.59 times less risky than 22nd Century. It trades about 0.03 of its potential returns per unit of risk. 22nd Century Group is currently generating about -0.32 per unit of risk. If you would invest  6,191  in Turning Point Brands on February 3, 2025 and sell it today you would earn a total of  177.00  from holding Turning Point Brands or generate 2.86% return on investment over 90 days.

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

Turning Point Brands  vs.  22nd Century Group

Turning Point Brands

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Turning Point Brands are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Turning Point is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

22nd Century Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days 22nd Century Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in June 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Turning Point and 22nd Century

The main advantage of trading using opposite Turning Point and 22nd Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point position performs unexpectedly, 22nd Century 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 22nd Century will offset losses from the drop in 22nd Century's long position.

The idea behind Turning Point Brands and 22nd Century Group 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.