Correlation Between Alcoa Corp and ASGN
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and ASGN 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 Alcoa Corp and ASGN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and ASGN Inc, you can compare the effects of market volatilities on Alcoa Corp and ASGN 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 Alcoa Corp with a short position of ASGN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and ASGN.
Diversification Opportunities for Alcoa Corp and ASGN
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alcoa and ASGN is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and ASGN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASGN Inc 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 ASGN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASGN Inc has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and ASGN go up and down completely randomly.
Pair Corralation between Alcoa Corp and ASGN
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 1.71 times more return on investment than ASGN. However, Alcoa Corp is 1.71 times more volatile than ASGN Inc. It trades about 0.34 of its potential returns per unit of risk. ASGN Inc is currently generating about -0.25 per unit of risk. If you would invest 2,967 in Alcoa Corp on January 19, 2024 and sell it today you would earn a total of 588.00 from holding Alcoa Corp or generate 19.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Alcoa Corp vs. ASGN Inc
Performance |
| Timeline |
| Alcoa Corp |
| ASGN Inc |
Alcoa Corp and ASGN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and ASGN
The main advantage of trading using opposite Alcoa Corp and ASGN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, ASGN 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 ASGN will offset losses from the drop in ASGN's long position.| Alcoa Corp vs. Immutep Ltd ADR | Alcoa Corp vs. Home Federal Bancorp | Alcoa Corp vs. Anheuser Busch Inbev | Alcoa Corp vs. Marker Therapeutics |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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