Correlation Between Alcoa Corp and PHILIP

Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and PHILIP 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 PHILIP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alcoa Corp and PHILIP MORRIS INTERNATIONAL, you can compare the effects of market volatilities on Alcoa Corp and PHILIP 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 PHILIP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and PHILIP.

Diversification Opportunities for Alcoa Corp and PHILIP

0.0

Correlation Coefficient

Alcoa Corp  PHILIP

Pay attention - limited upside

The 3 months correlation between Alcoa and PHILIP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and PHILIP MORRIS INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHILIP MORRIS INTERN 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 PHILIP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHILIP MORRIS INTERN has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and PHILIP go up and down completely randomly.

Pair Corralation between Alcoa Corp and PHILIP

If you would invest  0.00  in PHILIP MORRIS INTERNATIONAL on February 4, 2025 and sell it today you would earn a total of  0.00  from holding PHILIP MORRIS INTERNATIONAL or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Alcoa Corp  vs.  PHILIP MORRIS INTERNATIONAL

Alcoa Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alcoa Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

PHILIP MORRIS INTERN

Risk-Adjusted Performance

Very Weak

Over the last 90 days PHILIP MORRIS INTERNATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, PHILIP is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alcoa Corp and PHILIP

The main advantage of trading using opposite Alcoa Corp and PHILIP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, PHILIP 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 PHILIP will offset losses from the drop in PHILIP's long position.

The idea behind Alcoa Corp and PHILIP MORRIS INTERNATIONAL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 CEOs Directory module to screen CEOs from public companies around the world.