Correlation Between Philip Morris and GEN Restaurant

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Philip Morris and GEN Restaurant 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 GEN Restaurant 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 GEN Restaurant Group,, you can compare the effects of market volatilities on Philip Morris and GEN Restaurant 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 GEN Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philip Morris and GEN Restaurant.

Diversification Opportunities for Philip Morris and GEN Restaurant

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Philip and GEN is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Philip Morris International and GEN Restaurant Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEN Restaurant Group, 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 GEN Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEN Restaurant Group, has no effect on the direction of Philip Morris i.e., Philip Morris and GEN Restaurant go up and down completely randomly.

Pair Corralation between Philip Morris and GEN Restaurant

Allowing for the 90-day total investment horizon Philip Morris International is expected to generate 0.74 times more return on investment than GEN Restaurant. However, Philip Morris International is 1.35 times less risky than GEN Restaurant. It trades about -0.03 of its potential returns per unit of risk. GEN Restaurant Group, is currently generating about -0.22 per unit of risk. If you would invest  12,242  in Philip Morris International on October 22, 2024 and sell it today you would lose (83.00) from holding Philip Morris International or give up 0.68% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Philip Morris International  vs.  GEN Restaurant Group,

 Performance 
       Timeline  
Philip Morris Intern 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
GEN Restaurant Group, 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days GEN Restaurant Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Philip Morris and GEN Restaurant Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Philip Morris and GEN Restaurant

The main advantage of trading using opposite Philip Morris and GEN Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philip Morris position performs unexpectedly, GEN Restaurant 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 GEN Restaurant will offset losses from the drop in GEN Restaurant's long position.
The idea behind Philip Morris International and GEN Restaurant 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.
Check out your portfolio center.
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

Other Complementary Tools

Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.