Correlation Between Alcoa Corp and The Hartford
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and The Hartford 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 The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and The Hartford Equity, you can compare the effects of market volatilities on Alcoa Corp and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and The Hartford.
Diversification Opportunities for Alcoa Corp and The Hartford
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alcoa and The is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and The Hartford Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Equity 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Equity has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and The Hartford go up and down completely randomly.
Pair Corralation between Alcoa Corp and The Hartford
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 5.09 times more return on investment than The Hartford. However, Alcoa Corp is 5.09 times more volatile than The Hartford Equity. It trades about 0.09 of its potential returns per unit of risk. The Hartford Equity is currently generating about 0.12 per unit of risk. If you would invest 2,464 in Alcoa Corp on September 5, 2024 and sell it today you would earn a total of 2,126 from holding Alcoa Corp or generate 86.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alcoa Corp vs. The Hartford Equity
Performance |
| Timeline |
| Alcoa Corp |
| Hartford Equity |
Alcoa Corp and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and The Hartford
The main advantage of trading using opposite Alcoa Corp and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Alcoa Corp vs. Constellium Nv | Alcoa Corp vs. Century Aluminum | Alcoa Corp vs. China Hongqiao Group | Alcoa Corp vs. Kaiser Aluminum |
| The Hartford vs. Invesco Developing Markets | The Hartford vs. Delaware Diversified Income | The Hartford vs. Mfs Growth Fund | The Hartford vs. The Hartford Balanced |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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