Two Equities Correlation Analysis
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This model provides you with a quick lookup of cross correlation between two equities. Please specify two instruments to run the correlation.
Diversification Opportunities for Alcoa Corp and NYSE Composite
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alcoa and NYSE is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Alcoa Corp 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 Alcoa Corp are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and NYSE Composite go up and down completely randomly.
Pair Corralation between Alcoa Corp and NYSE Composite
Allowing for the 90-day total investment horizon Alcoa Corp is expected to under-perform the NYSE Composite. In addition to that, Alcoa Corp is 3.58 times more volatile than NYSE Composite. It trades about -0.01 of its total potential returns per unit of risk. NYSE Composite is currently generating about 0.03 per unit of volatility. If you would invest 1,565,261 in NYSE Composite on January 25, 2024 and sell it today you would earn a total of 210,547 from holding NYSE Composite or generate 13.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alcoa Corp vs. NYSE Composite
Performance |
| Timeline |
Alcoa Corp and NYSE Composite Volatility Contrast
Predicted Return Density |
| Returns |
Alcoa Corp
Pair trading matchups for Alcoa Corp
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Alcoa Corp and NYSE Composite
The main advantage of trading using opposite Alcoa Corp and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.| Alcoa Corp vs. Constellium Nv | Alcoa Corp vs. Century Aluminum | Alcoa Corp vs. China Hongqiao Group | Alcoa Corp vs. Kaiser Aluminum |
| NYSE Composite vs. Aduro Clean Technologies | NYSE Composite vs. Transphorm Technology | NYSE Composite vs. Advanced Micro Devices | NYSE Composite vs. IPG Photonics |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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