Correlation Between Alcoa Corp and Astra Space
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Astra Space 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 Astra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and Astra Space, you can compare the effects of market volatilities on Alcoa Corp and Astra Space 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 Astra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Astra Space.
Diversification Opportunities for Alcoa Corp and Astra Space
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alcoa and Astra is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Astra Space in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Space 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 Astra Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Space has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Astra Space go up and down completely randomly.
Pair Corralation between Alcoa Corp and Astra Space
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 0.4 times more return on investment than Astra Space. However, Alcoa Corp is 2.52 times less risky than Astra Space. It trades about 0.02 of its potential returns per unit of risk. Astra Space is currently generating about -0.04 per unit of risk. If you would invest 4,474 in Alcoa Corp on September 2, 2024 and sell it today you would earn a total of 169.00 from holding Alcoa Corp or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 81.25% |
| Values | Daily Returns |
Alcoa Corp vs. Astra Space
Performance |
| Timeline |
| Alcoa Corp |
| Astra Space |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alcoa Corp and Astra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and Astra Space
The main advantage of trading using opposite Alcoa Corp and Astra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Astra Space 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 Astra Space will offset losses from the drop in Astra Space's long position.| Alcoa Corp vs. Fortitude Gold Corp | Alcoa Corp vs. New Gold | Alcoa Corp vs. Galiano Gold | Alcoa Corp vs. GoldMining |
| Astra Space vs. Virgin Galactic Holdings | Astra Space vs. Planet Labs PBC | Astra Space vs. Eve Holding | Astra Space vs. Redwire Corp |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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