Correlation Between Femasys and ALTRIA

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

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

Diversification Opportunities for Femasys and ALTRIA

0.03

Correlation Coefficient

Femasys  ALTRIA

Significant diversification

The 3 months correlation between Femasys and ALTRIA is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Femasys and ALTRIA GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALTRIA GROUP INC and Femasys 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 Femasys 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 INC has no effect on the direction of Femasys i.e., Femasys and ALTRIA go up and down completely randomly.

Pair Corralation between Femasys and ALTRIA

Given the investment horizon of 90 days Femasys is expected to generate 2.25 times more return on investment than ALTRIA. However, Femasys is 2.25 times more volatile than ALTRIA GROUP INC. It trades about -0.02 of its potential returns per unit of risk. ALTRIA GROUP INC is currently generating about -0.22 per unit of risk. If you would invest  114.00  in Femasys on October 8, 2024 and sell it today you would lose (2.00) from holding Femasys or give up 1.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Femasys  vs.  ALTRIA GROUP INC

Femasys

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Femasys are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, Femasys is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ALTRIA GROUP INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ALTRIA GROUP INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ALTRIA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Femasys and ALTRIA

The main advantage of trading using opposite Femasys and ALTRIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Femasys 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 Femasys and ALTRIA GROUP INC 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.