Correlation Between Altria and Energisa
Can any of the company-specific risk be diversified away by investing in both Altria and Energisa 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 Energisa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altria Group and Energisa SA, you can compare the effects of market volatilities on Altria and Energisa 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 Energisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altria and Energisa.
Diversification Opportunities for Altria and Energisa
Good diversification
The 3 months correlation between Altria and Energisa is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Altria Group and Energisa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energisa SA 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 Energisa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energisa SA has no effect on the direction of Altria i.e., Altria and Energisa go up and down completely randomly.
Pair Corralation between Altria and Energisa
Assuming the 90 days trading horizon Altria Group is expected to generate 0.96 times more return on investment than Energisa. However, Altria Group is 1.04 times less risky than Energisa. It trades about 0.05 of its potential returns per unit of risk. Energisa SA is currently generating about 0.0 per unit of risk. If you would invest 21,281 in Altria Group on October 28, 2024 and sell it today you would earn a total of 8,826 from holding Altria Group or generate 41.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Altria Group vs. Energisa SA
Performance |
| Timeline |
| Altria Group |
| Energisa SA |
Altria and Energisa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altria and Energisa
The main advantage of trading using opposite Altria and Energisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altria position performs unexpectedly, Energisa 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 Energisa will offset losses from the drop in Energisa's long position.| Altria vs. Check Point Software | Altria vs. Guidewire Software, | Altria vs. Public Storage | Altria vs. Westinghouse Air Brake |
| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |