Correlation Between Philip Morris and Meiwu Technology

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

Diversification Opportunities for Philip Morris and Meiwu Technology

0.14

Correlation Coefficient

Philip Morris  Meiwu Technology

Average diversification

The 3 months correlation between Philip and Meiwu is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Philip Morris International and Meiwu Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiwu Technology 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 Meiwu Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiwu Technology has no effect on the direction of Philip Morris i.e., Philip Morris and Meiwu Technology go up and down completely randomly.

Pair Corralation between Philip Morris and Meiwu Technology

Allowing for the 90-day total investment horizon Philip Morris is expected to generate 1.8 times less return on investment than Meiwu Technology. But when comparing it to its historical volatility, Philip Morris International is 7.14 times less risky than Meiwu Technology. It trades about 0.06 of its potential returns per unit of risk. Meiwu Technology Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  669.00  in Meiwu Technology Co on September 20, 2024 and sell it today you would lose (488.00) from holding Meiwu Technology Co or give up 72.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Philip Morris International  vs.  Meiwu Technology Co

Philip Morris Intern

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Philip Morris International are ranked lower than 3 (%) 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 current stock price disarray, may contribute to short-term losses for the investors.

Meiwu Technology

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Meiwu Technology Co are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Meiwu Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Philip Morris and Meiwu Technology

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

The idea behind Philip Morris International and Meiwu Technology Co 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.