Correlation Between Alcoa Corp and Natixis ETF
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Natixis ETF 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 Natixis ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and Natixis ETF Trust, you can compare the effects of market volatilities on Alcoa Corp and Natixis ETF 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 Natixis ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Natixis ETF.
Diversification Opportunities for Alcoa Corp and Natixis ETF
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alcoa and Natixis is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Natixis ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis ETF 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 Natixis ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natixis ETF Trust has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Natixis ETF go up and down completely randomly.
Pair Corralation between Alcoa Corp and Natixis ETF
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 1.17 times less return on investment than Natixis ETF. In addition to that, Alcoa Corp is 4.74 times more volatile than Natixis ETF Trust. It trades about 0.02 of its total potential returns per unit of risk. Natixis ETF Trust is currently generating about 0.1 per unit of volatility. If you would invest 4,718 in Natixis ETF Trust on August 30, 2024 and sell it today you would earn a total of 813.00 from holding Natixis ETF Trust or generate 17.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 48.89% |
| Values | Daily Returns |
Alcoa Corp vs. Natixis ETF Trust
Performance |
| Timeline |
| Alcoa Corp |
| Natixis ETF Trust |
Alcoa Corp and Natixis ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and Natixis ETF
The main advantage of trading using opposite Alcoa Corp and Natixis ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Natixis ETF 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 Natixis ETF will offset losses from the drop in Natixis ETF's 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 |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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