Correlation Between Encore Capital and ALTRIA
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By analyzing existing cross correlation between Encore Capital Group and ALTRIA GROUP INC, you can compare the effects of market volatilities on Encore Capital and ALTRIA 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 Encore Capital with a short position of ALTRIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Encore Capital and ALTRIA.
Diversification Opportunities for Encore Capital and ALTRIA
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Encore and ALTRIA is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Encore Capital Group and ALTRIA GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALTRIA GROUP INC and Encore Capital 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 Encore Capital Group are associated (or correlated) with ALTRIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALTRIA GROUP INC has no effect on the direction of Encore Capital i.e., Encore Capital and ALTRIA go up and down completely randomly.
Pair Corralation between Encore Capital and ALTRIA
Given the investment horizon of 90 days Encore Capital Group is expected to generate 0.58 times more return on investment than ALTRIA. However, Encore Capital Group is 1.74 times less risky than ALTRIA. It trades about 0.2 of its potential returns per unit of risk. ALTRIA GROUP INC is currently generating about -0.14 per unit of risk. If you would invest 4,579 in Encore Capital Group on September 2, 2024 and sell it today you would earn a total of 340.00 from holding Encore Capital Group or generate 7.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Encore Capital Group vs. ALTRIA GROUP INC
Performance |
| Timeline |
| Encore Capital Group |
| ALTRIA GROUP INC |
Encore Capital and ALTRIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Encore Capital and ALTRIA
The main advantage of trading using opposite Encore Capital and ALTRIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Encore Capital position performs unexpectedly, ALTRIA 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 ALTRIA will offset losses from the drop in ALTRIA's long position.| Encore Capital vs. Guild Holdings Co | Encore Capital vs. Mr Cooper Group | Encore Capital vs. CNFinance Holdings | Encore Capital vs. Security National Financial |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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