Correlation Between Altria and Global Crossing
Can any of the company-specific risk be diversified away by investing in both Altria and Global Crossing 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 Global Crossing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altria Group and Global Crossing Airlines, you can compare the effects of market volatilities on Altria and Global Crossing 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 Global Crossing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altria and Global Crossing.
Diversification Opportunities for Altria and Global Crossing
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Altria and Global is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Altria Group and Global Crossing Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Crossing Airlines 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 Global Crossing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Crossing Airlines has no effect on the direction of Altria i.e., Altria and Global Crossing go up and down completely randomly.
Pair Corralation between Altria and Global Crossing
Allowing for the 90-day total investment horizon Altria Group is expected to generate 0.26 times more return on investment than Global Crossing. However, Altria Group is 3.92 times less risky than Global Crossing. It trades about 0.05 of its potential returns per unit of risk. Global Crossing Airlines is currently generating about -0.01 per unit of risk. If you would invest 3,987 in Altria Group on November 2, 2024 and sell it today you would earn a total of 1,228 from holding Altria Group or generate 30.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Altria Group vs. Global Crossing Airlines
Performance |
| Timeline |
| Altria Group |
| Global Crossing Airlines |
Altria and Global Crossing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altria and Global Crossing
The main advantage of trading using opposite Altria and Global Crossing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altria position performs unexpectedly, Global Crossing 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 Global Crossing will offset losses from the drop in Global Crossing's long position.| Altria vs. British American Tobacco | Altria vs. Universal | Altria vs. Imperial Brands PLC | Altria vs. Philip Morris International |
| Global Crossing vs. Finnair Oyj | Global Crossing vs. easyJet plc | Global Crossing vs. Norse Atlantic ASA | Global Crossing vs. Air New Zealand |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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