Correlation Between Alcoa Corp and IndexIQ
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and IndexIQ 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 IndexIQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and IndexIQ, you can compare the effects of market volatilities on Alcoa Corp and IndexIQ 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 IndexIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and IndexIQ.
Diversification Opportunities for Alcoa Corp and IndexIQ
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alcoa and IndexIQ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ 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 IndexIQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IndexIQ has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and IndexIQ go up and down completely randomly.
Pair Corralation between Alcoa Corp and IndexIQ
If you would invest (100.00) in IndexIQ on December 1, 2024 and sell it today you would earn a total of 100.00 from holding IndexIQ or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Alcoa Corp vs. IndexIQ
Performance |
| Timeline |
| Alcoa Corp |
| IndexIQ |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Alcoa Corp and IndexIQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and IndexIQ
The main advantage of trading using opposite Alcoa Corp and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, IndexIQ 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 IndexIQ will offset losses from the drop in IndexIQ's long position.| Alcoa Corp vs. Fortitude Gold Corp | Alcoa Corp vs. New Gold | Alcoa Corp vs. Galiano Gold | Alcoa Corp vs. GoldMining |
| IndexIQ vs. VanEck Natural Resources | IndexIQ vs. IQ Merger Arbitrage | IndexIQ vs. SPDR SP Global | IndexIQ vs. IQ Hedge Multi Strategy |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Positions Ratings 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 | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |