Correlation Between American Beacon and Alcoa Corp
Can any of the company-specific risk be diversified away by investing in both American Beacon and Alcoa Corp 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 American Beacon and Alcoa Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Mid Cap and Alcoa Corp, you can compare the effects of market volatilities on American Beacon and Alcoa Corp 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 American Beacon with a short position of Alcoa Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Alcoa Corp.
Diversification Opportunities for American Beacon and Alcoa Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Alcoa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Mid Cap and Alcoa Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcoa Corp and American Beacon 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 American Beacon Mid Cap are associated (or correlated) with Alcoa Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcoa Corp has no effect on the direction of American Beacon i.e., American Beacon and Alcoa Corp go up and down completely randomly.
Pair Corralation between American Beacon and Alcoa Corp
If you would invest 3,135 in Alcoa Corp on January 21, 2024 and sell it today you would earn a total of 418.00 from holding Alcoa Corp or generate 13.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
American Beacon Mid Cap vs. Alcoa Corp
Performance |
Timeline |
American Beacon Mid |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alcoa Corp |
American Beacon and Alcoa Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Beacon and Alcoa Corp
The main advantage of trading using opposite American Beacon and Alcoa Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Alcoa Corp 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 Alcoa Corp will offset losses from the drop in Alcoa Corp's long position.American Beacon vs. T Rowe Price | American Beacon vs. Balanced Fund Investor | American Beacon vs. T Rowe Price | American Beacon vs. Fa 529 Aggressive |
Alcoa Corp vs. Constellium Nv | Alcoa Corp vs. Century Aluminum | Alcoa Corp vs. China Hongqiao Group | Alcoa Corp vs. Kaiser Aluminum |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |