Correlation Between Alcoa Corp and Athenex
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Athenex 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 Athenex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and Athenex, you can compare the effects of market volatilities on Alcoa Corp and Athenex 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 Athenex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Athenex.
Diversification Opportunities for Alcoa Corp and Athenex
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alcoa and Athenex is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Athenex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athenex 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 Athenex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athenex has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Athenex go up and down completely randomly.
Pair Corralation between Alcoa Corp and Athenex
If you would invest 4,131 in Alcoa Corp on August 28, 2024 and sell it today you would earn a total of 611.00 from holding Alcoa Corp or generate 14.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Alcoa Corp vs. Athenex
Performance |
| Timeline |
| Alcoa Corp |
| Athenex |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alcoa Corp and Athenex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and Athenex
The main advantage of trading using opposite Alcoa Corp and Athenex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Athenex 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 Athenex will offset losses from the drop in Athenex's long position.The idea behind Alcoa Corp and Athenex 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.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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |