Correlation Between Alcoa Corp and Argonaut Gold
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Argonaut Gold 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 Argonaut Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and Argonaut Gold, you can compare the effects of market volatilities on Alcoa Corp and Argonaut Gold 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 Argonaut Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Argonaut Gold.
Diversification Opportunities for Alcoa Corp and Argonaut Gold
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alcoa and Argonaut is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Argonaut Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argonaut Gold 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 Argonaut Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argonaut Gold has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Argonaut Gold go up and down completely randomly.
Pair Corralation between Alcoa Corp and Argonaut Gold
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 4.31 times less return on investment than Argonaut Gold. In addition to that, Alcoa Corp is 1.22 times more volatile than Argonaut Gold. It trades about 0.03 of its total potential returns per unit of risk. Argonaut Gold is currently generating about 0.16 per unit of volatility. If you would invest 33.00 in Argonaut Gold on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Argonaut Gold or generate 12.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 24.6% |
| Values | Daily Returns |
Alcoa Corp vs. Argonaut Gold
Performance |
| Timeline |
| Alcoa Corp |
| Argonaut Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alcoa Corp and Argonaut Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and Argonaut Gold
The main advantage of trading using opposite Alcoa Corp and Argonaut Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Argonaut Gold 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 Argonaut Gold will offset losses from the drop in Argonaut Gold's long position.| Alcoa Corp vs. Fortitude Gold Corp | Alcoa Corp vs. New Gold | Alcoa Corp vs. Galiano Gold | Alcoa Corp vs. GoldMining |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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