Correlation Between ALTRIA and MYR

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

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

Diversification Opportunities for ALTRIA and MYR

0.06

Correlation Coefficient

ALTRIA  MYR

Significant diversification

The 3 months correlation between ALTRIA and MYR is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding ALTRIA GROUP INC and MYR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYR Group 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 INC are associated (or correlated) with MYR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYR Group has no effect on the direction of ALTRIA i.e., ALTRIA and MYR go up and down completely randomly.

Pair Corralation between ALTRIA and MYR

Assuming the 90 days trading horizon ALTRIA GROUP INC is expected to generate 0.15 times more return on investment than MYR. However, ALTRIA GROUP INC is 6.84 times less risky than MYR. It trades about -0.03 of its potential returns per unit of risk. MYR Group is currently generating about -0.07 per unit of risk. If you would invest  9,942  in ALTRIA GROUP INC on December 22, 2024 and sell it today you would lose (108.00) from holding ALTRIA GROUP INC or give up 1.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

ALTRIA GROUP INC  vs.  MYR Group

ALTRIA GROUP INC

Risk-Adjusted Performance

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 latest stock price disturbance, may contribute to short-term losses for the investors.

MYR Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days MYR Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with ALTRIA and MYR

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

The idea behind ALTRIA GROUP INC and MYR 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.