Correlation Between Alcoa Corp and Kinross Gold
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Kinross Gold 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 Kinross Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and Kinross Gold, you can compare the effects of market volatilities on Alcoa Corp and Kinross Gold 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 Kinross Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Kinross Gold.
Diversification Opportunities for Alcoa Corp and Kinross Gold
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alcoa and Kinross is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Kinross Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinross Gold 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 Kinross Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinross Gold has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Kinross Gold go up and down completely randomly.
Pair Corralation between Alcoa Corp and Kinross Gold
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 3.57 times less return on investment than Kinross Gold. In addition to that, Alcoa Corp is 1.31 times more volatile than Kinross Gold. It trades about 0.02 of its total potential returns per unit of risk. Kinross Gold is currently generating about 0.09 per unit of volatility. If you would invest 405.00 in Kinross Gold on August 30, 2024 and sell it today you would earn a total of 575.00 from holding Kinross Gold or generate 141.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alcoa Corp vs. Kinross Gold
Performance |
| Timeline |
| Alcoa Corp |
| Kinross Gold |
Alcoa Corp and Kinross Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and Kinross Gold
The main advantage of trading using opposite Alcoa Corp and Kinross Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Kinross Gold 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 Kinross Gold will offset losses from the drop in Kinross Gold'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 |
| Kinross Gold vs. Pan American Silver | Kinross Gold vs. Newmont Goldcorp Corp | Kinross Gold vs. Wheaton Precious Metals | Kinross Gold vs. Franco Nevada |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |