Correlation Between Graham Holdings and Altria
Can any of the company-specific risk be diversified away by investing in both Graham Holdings and Altria 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 Graham Holdings and Altria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graham Holdings Co and Altria Group, you can compare the effects of market volatilities on Graham Holdings 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 Graham Holdings with a short position of Altria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graham Holdings and Altria.
Diversification Opportunities for Graham Holdings and Altria
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Graham and Altria is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Graham Holdings Co and Altria Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altria Group and Graham Holdings 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 Graham Holdings Co 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 has no effect on the direction of Graham Holdings i.e., Graham Holdings and Altria go up and down completely randomly.
Pair Corralation between Graham Holdings and Altria
Considering the 90-day investment horizon Graham Holdings Co is expected to under-perform the Altria. In addition to that, Graham Holdings is 2.03 times more volatile than Altria Group. It trades about -0.2 of its total potential returns per unit of risk. Altria Group is currently generating about -0.29 per unit of volatility. If you would invest 5,443 in Altria Group on October 11, 2024 and sell it today you would lose (294.00) from holding Altria Group or give up 5.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Graham Holdings Co vs. Altria Group
Performance |
| Timeline |
| Graham Holdings |
| Altria Group |
Graham Holdings and Altria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graham Holdings and Altria
The main advantage of trading using opposite Graham Holdings and Altria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graham Holdings 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.| Graham Holdings vs. Cable One | Graham Holdings vs. Adtalem Global Education | Graham Holdings vs. Axalta Coating Systems | Graham Holdings vs. Madison Square Garden |
| Altria vs. British American Tobacco | Altria vs. Universal | Altria vs. Imperial Brands PLC | Altria vs. Philip Morris International |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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