Correlation Between Alcoa Corp and K92 Mining
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and K92 Mining 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 K92 Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and K92 Mining, you can compare the effects of market volatilities on Alcoa Corp and K92 Mining 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 K92 Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and K92 Mining.
Diversification Opportunities for Alcoa Corp and K92 Mining
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alcoa and K92 is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and K92 Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K92 Mining 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 K92 Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K92 Mining has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and K92 Mining go up and down completely randomly.
Pair Corralation between Alcoa Corp and K92 Mining
Allowing for the 90-day total investment horizon Alcoa Corp is expected to under-perform the K92 Mining. In addition to that, Alcoa Corp is 1.4 times more volatile than K92 Mining. It trades about -0.02 of its total potential returns per unit of risk. K92 Mining is currently generating about 0.13 per unit of volatility. If you would invest 661.00 in K92 Mining on November 27, 2024 and sell it today you would earn a total of 34.00 from holding K92 Mining or generate 5.14% 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. K92 Mining
Performance |
| Timeline |
| Alcoa Corp |
| K92 Mining |
Alcoa Corp and K92 Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and K92 Mining
The main advantage of trading using opposite Alcoa Corp and K92 Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, K92 Mining 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 K92 Mining will offset losses from the drop in K92 Mining's long position.| Alcoa Corp vs. Fortitude Gold Corp | Alcoa Corp vs. New Gold | Alcoa Corp vs. Galiano Gold | Alcoa Corp vs. GoldMining |
| K92 Mining vs. I 80 Gold Corp | K92 Mining vs. Equinox Gold Corp | K92 Mining vs. Contango ORE | K92 Mining vs. Orla Mining |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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