Correlation Between Alcoa Corp and Keweenaw Land
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Keweenaw Land 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 Keweenaw Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and Keweenaw Land Association, you can compare the effects of market volatilities on Alcoa Corp and Keweenaw Land 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 Keweenaw Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Keweenaw Land.
Diversification Opportunities for Alcoa Corp and Keweenaw Land
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alcoa and Keweenaw is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Keweenaw Land Association in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keweenaw Land Association 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 Keweenaw Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keweenaw Land Association has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Keweenaw Land go up and down completely randomly.
Pair Corralation between Alcoa Corp and Keweenaw Land
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 1.45 times less return on investment than Keweenaw Land. But when comparing it to its historical volatility, Alcoa Corp is 1.27 times less risky than Keweenaw Land. It trades about 0.05 of its potential returns per unit of risk. Keweenaw Land Association is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,125 in Keweenaw Land Association on August 29, 2024 and sell it today you would earn a total of 1,375 from holding Keweenaw Land Association or generate 64.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alcoa Corp vs. Keweenaw Land Association
Performance |
| Timeline |
| Alcoa Corp |
| Keweenaw Land Association |
Alcoa Corp and Keweenaw Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and Keweenaw Land
The main advantage of trading using opposite Alcoa Corp and Keweenaw Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Keweenaw Land 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 Keweenaw Land will offset losses from the drop in Keweenaw Land'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 |
| Keweenaw Land vs. Anglo American plc | Keweenaw Land vs. Glencore PLC ADR | Keweenaw Land vs. Fortescue Metals Group | Keweenaw Land vs. South32 Limited |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |