Correlation Between Altria and Amgen
Can any of the company-specific risk be diversified away by investing in both Altria and Amgen 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 Altria and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altria Group and Amgen Inc, you can compare the effects of market volatilities on Altria and Amgen 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 Altria with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altria and Amgen.
Diversification Opportunities for Altria and Amgen
Pay attention - limited upside
The 3 months correlation between Altria and Amgen is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Altria Group and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Altria 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 Altria Group are associated (or correlated) with Amgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amgen Inc has no effect on the direction of Altria i.e., Altria and Amgen go up and down completely randomly.
Pair Corralation between Altria and Amgen
Allowing for the 90-day total investment horizon Altria Group is expected to generate 0.72 times more return on investment than Amgen. However, Altria Group is 1.38 times less risky than Amgen. It trades about 0.09 of its potential returns per unit of risk. Amgen Inc is currently generating about 0.05 per unit of risk. If you would invest 3,899 in Altria Group on September 12, 2024 and sell it today you would earn a total of 1,650 from holding Altria Group or generate 42.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altria Group vs. Amgen Inc
Performance |
| Timeline |
| Altria Group |
| Amgen Inc |
Altria and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altria and Amgen
The main advantage of trading using opposite Altria and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altria position performs unexpectedly, Amgen 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 Amgen will offset losses from the drop in Amgen's long position.| Altria vs. British American Tobacco | Altria vs. Universal | Altria vs. Imperial Brands PLC | Altria vs. Philip Morris International |
| Amgen vs. Victory Integrity Smallmid Cap | Amgen vs. Hilton Worldwide Holdings | Amgen vs. NVIDIA | Amgen vs. JPMorgan Chase Co |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |