Correlation Between Altria and SpartanNash

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

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

Diversification Opportunities for Altria and SpartanNash

0.8

Correlation Coefficient

Altria  SpartanNash

Very poor diversification

The 3 months correlation between Altria and SpartanNash is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Altria Group and SpartanNash Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpartanNash 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 SpartanNash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpartanNash has no effect on the direction of Altria i.e., Altria and SpartanNash go up and down completely randomly.

Pair Corralation between Altria and SpartanNash

Allowing for the 90-day total investment horizon Altria Group is expected to generate 0.6 times more return on investment than SpartanNash. However, Altria Group is 1.67 times less risky than SpartanNash. It trades about 0.17 of its potential returns per unit of risk. SpartanNash Co is currently generating about 0.1 per unit of risk. If you would invest  5,145  in Altria Group on December 30, 2024 and sell it today you would earn a total of  685.00  from holding Altria Group or generate 13.31% return on investment over 90 days.

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

Altria Group  vs.  SpartanNash Co

Altria Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Altria Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Altria displayed solid returns over the last few months and may actually be approaching a breakup point.

SpartanNash

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SpartanNash Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, SpartanNash displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Altria and SpartanNash

The main advantage of trading using opposite Altria and SpartanNash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altria position performs unexpectedly, SpartanNash 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 SpartanNash will offset losses from the drop in SpartanNash's long position.

The idea behind Altria Group and SpartanNash Co 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..