Correlation Between Alcoa Corp and Journey Energy
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Journey Energy 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 Journey Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and Journey Energy, you can compare the effects of market volatilities on Alcoa Corp and Journey Energy 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 Journey Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Journey Energy.
Diversification Opportunities for Alcoa Corp and Journey Energy
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alcoa and Journey is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Journey Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Journey Energy 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 Journey Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Journey Energy has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Journey Energy go up and down completely randomly.
Pair Corralation between Alcoa Corp and Journey Energy
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 1.1 times more return on investment than Journey Energy. However, Alcoa Corp is 1.1 times more volatile than Journey Energy. It trades about 0.16 of its potential returns per unit of risk. Journey Energy is currently generating about -0.07 per unit of risk. If you would invest 4,131 in Alcoa Corp on August 29, 2024 and sell it today you would earn a total of 449.00 from holding Alcoa Corp or generate 10.87% 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. Journey Energy
Performance |
| Timeline |
| Alcoa Corp |
| Journey Energy |
Alcoa Corp and Journey Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and Journey Energy
The main advantage of trading using opposite Alcoa Corp and Journey Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Journey Energy 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 Journey Energy will offset losses from the drop in Journey Energy'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 |
| Journey Energy vs. Frontera Energy Corp | Journey Energy vs. Eco Oil Gas | Journey Energy vs. Total Helium | Journey Energy vs. Avanti Energy |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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