Correlation Between Altria and Sharecare
Can any of the company-specific risk be diversified away by investing in both Altria and Sharecare 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 Sharecare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altria Group and Sharecare, you can compare the effects of market volatilities on Altria and Sharecare 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 Sharecare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altria and Sharecare.
Diversification Opportunities for Altria and Sharecare
Poor diversification
The 3 months correlation between Altria and Sharecare is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Altria Group and Sharecare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharecare 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 Sharecare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharecare has no effect on the direction of Altria i.e., Altria and Sharecare go up and down completely randomly.
Pair Corralation between Altria and Sharecare
If you would invest 5,229 in Altria Group on November 2, 2024 and sell it today you would earn a total of 37.00 from holding Altria Group or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Altria Group vs. Sharecare
Performance |
| Timeline |
| Altria Group |
| Sharecare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Altria and Sharecare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altria and Sharecare
The main advantage of trading using opposite Altria and Sharecare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altria position performs unexpectedly, Sharecare 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 Sharecare will offset losses from the drop in Sharecare's long position.| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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