Correlation Between Alcoa Corp and CytomX Therapeutics
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and CytomX Therapeutics 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 CytomX Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and CytomX Therapeutics, you can compare the effects of market volatilities on Alcoa Corp and CytomX Therapeutics 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 CytomX Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and CytomX Therapeutics.
Diversification Opportunities for Alcoa Corp and CytomX Therapeutics
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alcoa and CytomX is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and CytomX Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CytomX Therapeutics 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 CytomX Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CytomX Therapeutics has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and CytomX Therapeutics go up and down completely randomly.
Pair Corralation between Alcoa Corp and CytomX Therapeutics
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 3.66 times less return on investment than CytomX Therapeutics. But when comparing it to its historical volatility, Alcoa Corp is 3.43 times less risky than CytomX Therapeutics. It trades about 0.02 of its potential returns per unit of risk. CytomX Therapeutics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 171.00 in CytomX Therapeutics on August 24, 2024 and sell it today you would lose (84.30) from holding CytomX Therapeutics or give up 49.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Alcoa Corp vs. CytomX Therapeutics
Performance |
| Timeline |
| Alcoa Corp |
| CytomX Therapeutics |
Alcoa Corp and CytomX Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and CytomX Therapeutics
The main advantage of trading using opposite Alcoa Corp and CytomX Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, CytomX Therapeutics 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 CytomX Therapeutics will offset losses from the drop in CytomX Therapeutics' long position.| Alcoa Corp vs. Small Cap Core | Alcoa Corp vs. Morningstar Unconstrained Allocation | Alcoa Corp vs. Mutual Of America | Alcoa Corp vs. Ep Emerging Markets |
| CytomX Therapeutics vs. ZyVersa Therapeutics | CytomX Therapeutics vs. Sonnet Biotherapeutics Holdings | CytomX Therapeutics vs. Zura Bio Limited | CytomX Therapeutics vs. Phio Pharmaceuticals 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |