Correlation Between IMedia Brands and Alcoa Corp
Can any of the company-specific risk be diversified away by investing in both IMedia Brands 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 IMedia Brands and Alcoa Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IMedia Brands and Alcoa Corp, you can compare the effects of market volatilities on IMedia Brands 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 IMedia Brands with a short position of Alcoa Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMedia Brands and Alcoa Corp.
Diversification Opportunities for IMedia Brands and Alcoa Corp
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IMedia and Alcoa is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding IMedia Brands and Alcoa Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcoa Corp and IMedia Brands 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 IMedia Brands 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 IMedia Brands i.e., IMedia Brands and Alcoa Corp go up and down completely randomly.
Pair Corralation between IMedia Brands and Alcoa Corp
Given the investment horizon of 90 days IMedia Brands is expected to under-perform the Alcoa Corp. In addition to that, IMedia Brands is 6.58 times more volatile than Alcoa Corp. It trades about -0.12 of its total potential returns per unit of risk. Alcoa Corp is currently generating about 0.02 per unit of volatility. If you would invest 3,497 in Alcoa Corp on January 21, 2024 and sell it today you would earn a total of 56.00 from holding Alcoa Corp or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 38.31% |
| Values | Daily Returns |
IMedia Brands vs. Alcoa Corp
Performance |
| Timeline |
| IMedia Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Alcoa Corp |
IMedia Brands and Alcoa Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IMedia Brands and Alcoa Corp
The main advantage of trading using opposite IMedia Brands and Alcoa Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMedia Brands 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.| IMedia Brands vs. Janone Inc | IMedia Brands vs. Xcel Brands | IMedia Brands vs. FlexShopper | IMedia Brands vs. Monopar Therapeutics |
| 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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