Correlation Between Charlies Holdings and Altria

Can any of the company-specific risk be diversified away by investing in both Charlies Holdings 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 Charlies Holdings and Altria into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Charlies Holdings and Altria Group, you can compare the effects of market volatilities on Charlies Holdings 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 Charlies Holdings with a short position of Altria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charlies Holdings and Altria.

Diversification Opportunities for Charlies Holdings and Altria

0.1

Correlation Coefficient

Charlies Holdings  Altria

Average diversification

The 3 months correlation between Charlies and Altria is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Charlies Holdings and Altria Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altria Group and Charlies Holdings 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 Charlies Holdings 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 Charlies Holdings i.e., Charlies Holdings and Altria go up and down completely randomly.

Pair Corralation between Charlies Holdings and Altria

If you would invest  9.32  in Charlies Holdings on September 22, 2024 and sell it today you would earn a total of  0.00  from holding Charlies Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Charlies Holdings  vs.  Altria Group

Charlies Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Charlies Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Charlies Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Altria Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Altria Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Altria is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Charlies Holdings and Altria

The main advantage of trading using opposite Charlies Holdings and Altria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charlies Holdings 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.

The idea behind Charlies Holdings and Altria Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.