Correlation Between Doubledown Interactive and Philip Morris

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

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

Diversification Opportunities for Doubledown Interactive and Philip Morris

-0.69

Correlation Coefficient

Doubledown Interactive  Philip Morris

Excellent diversification

The 3 months correlation between Doubledown and Philip is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Doubledown Interactive Co 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 Doubledown Interactive 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 Doubledown Interactive Co 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 Doubledown Interactive i.e., Doubledown Interactive and Philip Morris go up and down completely randomly.

Pair Corralation between Doubledown Interactive and Philip Morris

Considering the 90-day investment horizon Doubledown Interactive Co is expected to under-perform the Philip Morris. In addition to that, Doubledown Interactive is 1.4 times more volatile than Philip Morris International. It trades about -0.02 of its total potential returns per unit of risk. Philip Morris International is currently generating about 0.25 per unit of volatility. If you would invest  11,896  in Philip Morris International on December 29, 2024 and sell it today you would earn a total of  3,620  from holding Philip Morris International or generate 30.43% return on investment over 90 days.

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

Doubledown Interactive Co  vs.  Philip Morris International

Doubledown Interactive

Risk-Adjusted Performance

Very Weak

Over the last 90 days Doubledown Interactive Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Doubledown Interactive is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Philip Morris Intern

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Philip Morris International are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent primary indicators, Philip Morris displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Doubledown Interactive and Philip Morris

The main advantage of trading using opposite Doubledown Interactive and Philip Morris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doubledown Interactive 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 Doubledown Interactive Co 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.