Correlation Between Turning Point and Pyxus International

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

Diversification Opportunities for Turning Point and Pyxus International

-0.45

Correlation Coefficient

Turning Point  Pyxus International

Very good diversification

The 3 months correlation between Turning and Pyxus is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands and Pyxus International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxus International 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 Pyxus International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pyxus International has no effect on the direction of Turning Point i.e., Turning Point and Pyxus International go up and down completely randomly.

Pair Corralation between Turning Point and Pyxus International

Considering the 90-day investment horizon Turning Point is expected to generate 5.03 times less return on investment than Pyxus International. But when comparing it to its historical volatility, Turning Point Brands is 7.33 times less risky than Pyxus International. It trades about 0.11 of its potential returns per unit of risk. Pyxus International is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  55.00  in Pyxus International on September 21, 2024 and sell it today you would earn a total of  165.00  from holding Pyxus International or generate 300.0% return on investment over 90 days.

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

Turning Point Brands  vs.  Pyxus International

Turning Point Brands

Risk-Adjusted Performance

20 of 100

Solid

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

Pyxus International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pyxus International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Pyxus International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Turning Point and Pyxus International

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

The idea behind Turning Point Brands and Pyxus 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .