Correlation Between Alcoa Corp and Innovator ETFs
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Innovator ETFs 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 Innovator ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and Innovator ETFs Trust, you can compare the effects of market volatilities on Alcoa Corp and Innovator ETFs 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 Innovator ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Innovator ETFs.
Diversification Opportunities for Alcoa Corp and Innovator ETFs
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alcoa and Innovator is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Innovator ETFs Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator ETFs Trust 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 Innovator ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator ETFs Trust has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Innovator ETFs go up and down completely randomly.
Pair Corralation between Alcoa Corp and Innovator ETFs
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 8.53 times more return on investment than Innovator ETFs. However, Alcoa Corp is 8.53 times more volatile than Innovator ETFs Trust. It trades about 0.16 of its potential returns per unit of risk. Innovator ETFs Trust is currently generating about -0.1 per unit of risk. If you would invest 4,131 in Alcoa Corp on August 29, 2024 and sell it today you would earn a total of 457.00 from holding Alcoa Corp or generate 11.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alcoa Corp vs. Innovator ETFs Trust
Performance |
| Timeline |
| Alcoa Corp |
| Innovator ETFs Trust |
Alcoa Corp and Innovator ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and Innovator ETFs
The main advantage of trading using opposite Alcoa Corp and Innovator ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Innovator ETFs 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 Innovator ETFs will offset losses from the drop in Innovator ETFs' long position.| Alcoa Corp vs. Direxion Daily FTSE | Alcoa Corp vs. Dodge Global Stock | Alcoa Corp vs. Collegium Pharmaceutical | Alcoa Corp vs. Dreyfus Natural Resources |
| Innovator ETFs vs. Freedom Day Dividend | Innovator ETFs vs. Franklin Templeton ETF | Innovator ETFs vs. iShares MSCI China | Innovator ETFs vs. Tidal Trust II |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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