Correlation Between Charlies Holdings and Philip Morris

Can any of the company-specific risk be diversified away by investing in both Charlies Holdings and Philip Morris 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 Charlies Holdings and Philip Morris into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Charlies Holdings and Philip Morris International, you can compare the effects of market volatilities on Charlies Holdings and Philip Morris 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 Charlies Holdings with a short position of Philip Morris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charlies Holdings and Philip Morris.

Diversification Opportunities for Charlies Holdings and Philip Morris

-0.22

Correlation Coefficient

Charlies Holdings  Philip Morris

Very good diversification

The 3 months correlation between Charlies and Philip is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Charlies Holdings and Philip Morris International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philip Morris Intern and Charlies Holdings 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 Charlies Holdings are associated (or correlated) with Philip Morris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Philip Morris Intern has no effect on the direction of Charlies Holdings i.e., Charlies Holdings and Philip Morris go up and down completely randomly.

Pair Corralation between Charlies Holdings and Philip Morris

If you would invest  9.32  in Charlies Holdings on October 1, 2024 and sell it today you would earn a total of  0.00  from holding Charlies Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Charlies Holdings  vs.  Philip Morris International

Charlies Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Charlies Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Charlies Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Philip Morris Intern

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Philip Morris International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Charlies Holdings and Philip Morris

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

The idea behind Charlies Holdings and Philip Morris 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.