Correlation Between ELEKTROBIT and Altria

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

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

Diversification Opportunities for ELEKTROBIT and Altria

-0.58

Correlation Coefficient

ELEKTROBIT  Altria

Excellent diversification

The 3 months correlation between ELEKTROBIT and Altria is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding ELEKTROBIT and Altria Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altria Group and ELEKTROBIT 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 ELEKTROBIT 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 ELEKTROBIT i.e., ELEKTROBIT and Altria go up and down completely randomly.

Pair Corralation between ELEKTROBIT and Altria

Assuming the 90 days trading horizon ELEKTROBIT is expected to generate 2.8 times more return on investment than Altria. However, ELEKTROBIT is 2.8 times more volatile than Altria Group. It trades about 0.16 of its potential returns per unit of risk. Altria Group is currently generating about 0.0 per unit of risk. If you would invest  769.00  in ELEKTROBIT on April 25, 2025 and sell it today you would earn a total of  285.00  from holding ELEKTROBIT or generate 37.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

ELEKTROBIT  vs.  Altria Group

ELEKTROBIT

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ELEKTROBIT are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, ELEKTROBIT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Altria Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Altria Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Altria is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ELEKTROBIT and Altria

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

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.