Correlation Between Pyxus International and Philip Morris

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

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

Diversification Opportunities for Pyxus International and Philip Morris

-0.34

Correlation Coefficient

Pyxus International  Philip Morris

Very good diversification

The 3 months correlation between Pyxus and Philip is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Pyxus International 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 Pyxus International 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 Pyxus International 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 Pyxus International i.e., Pyxus International and Philip Morris go up and down completely randomly.

Pair Corralation between Pyxus International and Philip Morris

Given the investment horizon of 90 days Pyxus International is expected to generate 5.52 times more return on investment than Philip Morris. However, Pyxus International is 5.52 times more volatile than Philip Morris International. It trades about 0.05 of its potential returns per unit of risk. Philip Morris International is currently generating about 0.06 per unit of risk. If you would invest  295.00  in Pyxus International on September 19, 2024 and sell it today you would lose (1.00) from holding Pyxus International or give up 0.34% of portfolio value over 90 days.

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

Pyxus International  vs.  Philip Morris International

Pyxus International

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pyxus International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Pyxus International showed solid returns over the last few months and may actually be approaching a breakup point.

Philip Morris Intern

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Philip Morris International are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Philip Morris may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Pyxus International and Philip Morris

The main advantage of trading using opposite Pyxus International and Philip Morris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pyxus International 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 Pyxus International 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .