Correlation Between Alcoa Corp and Intel
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Intel 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 Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and Intel, you can compare the effects of market volatilities on Alcoa Corp and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Intel.
Diversification Opportunities for Alcoa Corp and Intel
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alcoa and Intel is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Intel go up and down completely randomly.
Pair Corralation between Alcoa Corp and Intel
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 2.06 times less return on investment than Intel. In addition to that, Alcoa Corp is 1.41 times more volatile than Intel. It trades about 0.0 of its total potential returns per unit of risk. Intel is currently generating about 0.01 per unit of volatility. If you would invest 3,560 in Intel on January 21, 2024 and sell it today you would lose (140.00) from holding Intel or give up 3.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alcoa Corp vs. Intel
Performance |
| Timeline |
| Alcoa Corp |
| Intel |
Alcoa Corp and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and Intel
The main advantage of trading using opposite Alcoa Corp and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| Alcoa Corp vs. Constellium Nv | Alcoa Corp vs. Century Aluminum | Alcoa Corp vs. China Hongqiao Group | Alcoa Corp vs. Kaiser Aluminum |
| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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