Correlation Between Alcoa Corp and EA Series
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and EA Series 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 EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and EA Series Trust, you can compare the effects of market volatilities on Alcoa Corp and EA Series 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 EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and EA Series.
Diversification Opportunities for Alcoa Corp and EA Series
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alcoa and FTWO is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series 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 EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and EA Series go up and down completely randomly.
Pair Corralation between Alcoa Corp and EA Series
Allowing for the 90-day total investment horizon Alcoa Corp is expected to under-perform the EA Series. In addition to that, Alcoa Corp is 1.84 times more volatile than EA Series Trust. It trades about -0.15 of its total potential returns per unit of risk. EA Series Trust is currently generating about 0.04 per unit of volatility. If you would invest 3,181 in EA Series Trust on November 18, 2024 and sell it today you would earn a total of 28.00 from holding EA Series Trust or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alcoa Corp vs. EA Series Trust
Performance |
| Timeline |
| Alcoa Corp |
| EA Series Trust |
Alcoa Corp and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and EA Series
The main advantage of trading using opposite Alcoa Corp and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' long position.| Alcoa Corp vs. Constellium Nv | Alcoa Corp vs. China Hongqiao Group | Alcoa Corp vs. Kaiser Aluminum | Alcoa Corp vs. Norsk Hydro ASA |
| EA Series vs. Amplify Seymour Cannabis | EA Series vs. AdvisorShares Pure Cannabis | EA Series vs. Cambria Cannabis ETF | EA Series vs. AdvisorShares Pure Cannabis |
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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