Correlation Between PHILIP and Bill

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

By analyzing existing cross correlation between PHILIP MORRIS INTL and Bill Com Holdings, you can compare the effects of market volatilities on PHILIP and Bill 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 with a short position of Bill. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHILIP and Bill.

Diversification Opportunities for PHILIP and Bill

-0.34

Correlation Coefficient

PHILIP  Bill

Very good diversification

The 3 months correlation between PHILIP and Bill is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding PHILIP MORRIS INTL and Bill Com Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bill Com Holdings and PHILIP 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 INTL are associated (or correlated) with Bill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bill Com Holdings has no effect on the direction of PHILIP i.e., PHILIP and Bill go up and down completely randomly.

Pair Corralation between PHILIP and Bill

Assuming the 90 days trading horizon PHILIP MORRIS INTL is expected to under-perform the Bill. But the bond apears to be less risky and, when comparing its historical volatility, PHILIP MORRIS INTL is 3.56 times less risky than Bill. The bond trades about -0.19 of its potential returns per unit of risk. The Bill Com Holdings is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  5,289  in Bill Com Holdings on September 24, 2024 and sell it today you would earn a total of  3,656  from holding Bill Com Holdings or generate 69.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

PHILIP MORRIS INTL  vs.  Bill Com Holdings

PHILIP MORRIS INTL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PHILIP MORRIS INTL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for PHILIP MORRIS INTL investors.

Bill Com Holdings

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bill Com Holdings are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, Bill disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PHILIP and Bill

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

The idea behind PHILIP MORRIS INTL and Bill Com Holdings 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.