Correlation Between Alcoa Corp and ProShares MSCI
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and ProShares MSCI 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 ProShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and ProShares MSCI Europe, you can compare the effects of market volatilities on Alcoa Corp and ProShares MSCI 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 ProShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and ProShares MSCI.
Diversification Opportunities for Alcoa Corp and ProShares MSCI
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alcoa and ProShares is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and ProShares MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares MSCI Europe 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 ProShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares MSCI Europe has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and ProShares MSCI go up and down completely randomly.
Pair Corralation between Alcoa Corp and ProShares MSCI
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 3.46 times more return on investment than ProShares MSCI. However, Alcoa Corp is 3.46 times more volatile than ProShares MSCI Europe. It trades about 0.14 of its potential returns per unit of risk. ProShares MSCI Europe is currently generating about -0.19 per unit of risk. If you would invest 4,178 in Alcoa Corp on August 24, 2024 and sell it today you would earn a total of 378.00 from holding Alcoa Corp or generate 9.05% 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. ProShares MSCI Europe
Performance |
| Timeline |
| Alcoa Corp |
| ProShares MSCI Europe |
Alcoa Corp and ProShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and ProShares MSCI
The main advantage of trading using opposite Alcoa Corp and ProShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, ProShares MSCI 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 ProShares MSCI will offset losses from the drop in ProShares MSCI's long position.| Alcoa Corp vs. Eshallgo Class A | Alcoa Corp vs. Amtech Systems | Alcoa Corp vs. Gold Fields Ltd | Alcoa Corp vs. Aegean Airlines SA |
| ProShares MSCI vs. WisdomTree Europe Hedged | ProShares MSCI vs. WisdomTree International Hedged | ProShares MSCI vs. WisdomTree Emerging Markets | ProShares MSCI vs. WisdomTree Dynamic Currency |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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