Correlation Between Alcoa Corp and GraniteShares
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and GraniteShares 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 GraniteShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and GraniteShares 1x Short, you can compare the effects of market volatilities on Alcoa Corp and GraniteShares 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 GraniteShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and GraniteShares.
Diversification Opportunities for Alcoa Corp and GraniteShares
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alcoa and GraniteShares is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and GraniteShares 1x Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 1x Short 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 GraniteShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares 1x Short has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and GraniteShares go up and down completely randomly.
Pair Corralation between Alcoa Corp and GraniteShares
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 0.31 times more return on investment than GraniteShares. However, Alcoa Corp is 3.18 times less risky than GraniteShares. It trades about 0.21 of its potential returns per unit of risk. GraniteShares 1x Short is currently generating about -0.21 per unit of risk. If you would invest 4,056 in Alcoa Corp on August 31, 2024 and sell it today you would earn a total of 587.00 from holding Alcoa Corp or generate 14.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alcoa Corp vs. GraniteShares 1x Short
Performance |
| Timeline |
| Alcoa Corp |
| GraniteShares 1x Short |
Alcoa Corp and GraniteShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and GraniteShares
The main advantage of trading using opposite Alcoa Corp and GraniteShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, GraniteShares 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 GraniteShares will offset losses from the drop in GraniteShares' long position.| Alcoa Corp vs. RLJ Lodging Trust | Alcoa Corp vs. Aquagold International | Alcoa Corp vs. Stepstone Group | Alcoa Corp vs. Morningstar Unconstrained Allocation |
| GraniteShares vs. Tidal Trust II | GraniteShares vs. Tidal Trust II | GraniteShares vs. Direxion Daily META | GraniteShares vs. Direxion Daily META |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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