Correlation Between Western Acquisition and Altria
Can any of the company-specific risk be diversified away by investing in both Western Acquisition 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 Western Acquisition and Altria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Acquisition Ventures and Altria Group, you can compare the effects of market volatilities on Western Acquisition 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 Western Acquisition with a short position of Altria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Acquisition and Altria.
Diversification Opportunities for Western Acquisition and Altria
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Altria is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Western Acquisition Ventures and Altria Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altria Group and Western Acquisition 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 Western Acquisition Ventures 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 Western Acquisition i.e., Western Acquisition and Altria go up and down completely randomly.
Pair Corralation between Western Acquisition and Altria
Given the investment horizon of 90 days Western Acquisition is expected to generate 25.82 times less return on investment than Altria. In addition to that, Western Acquisition is 1.12 times more volatile than Altria Group. It trades about 0.0 of its total potential returns per unit of risk. Altria Group is currently generating about 0.1 per unit of volatility. If you would invest 3,833 in Altria Group on September 12, 2024 and sell it today you would earn a total of 1,674 from holding Altria Group or generate 43.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Acquisition Ventures vs. Altria Group
Performance |
| Timeline |
| Western Acquisition |
| Altria Group |
Western Acquisition and Altria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Acquisition and Altria
The main advantage of trading using opposite Western Acquisition and Altria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Acquisition 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.| Western Acquisition vs. HUMANA INC | Western Acquisition vs. Barloworld Ltd ADR | Western Acquisition vs. Morningstar Unconstrained Allocation | Western Acquisition vs. Thrivent High Yield |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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