Correlation Between Alcoa Corp and Lig Assets
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Lig Assets 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 Lig Assets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and Lig Assets, you can compare the effects of market volatilities on Alcoa Corp and Lig Assets 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 Lig Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Lig Assets.
Diversification Opportunities for Alcoa Corp and Lig Assets
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alcoa and Lig is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Lig Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lig Assets 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 Lig Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lig Assets has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Lig Assets go up and down completely randomly.
Pair Corralation between Alcoa Corp and Lig Assets
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 0.3 times more return on investment than Lig Assets. However, Alcoa Corp is 3.37 times less risky than Lig Assets. It trades about 0.09 of its potential returns per unit of risk. Lig Assets is currently generating about 0.03 per unit of risk. If you would invest 2,465 in Alcoa Corp on September 2, 2024 and sell it today you would earn a total of 2,178 from holding Alcoa Corp or generate 88.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.79% |
| Values | Daily Returns |
Alcoa Corp vs. Lig Assets
Performance |
| Timeline |
| Alcoa Corp |
| Lig Assets |
Alcoa Corp and Lig Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and Lig Assets
The main advantage of trading using opposite Alcoa Corp and Lig Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Lig Assets 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 Lig Assets will offset losses from the drop in Lig Assets' long position.| Alcoa Corp vs. Fortitude Gold Corp | Alcoa Corp vs. New Gold | Alcoa Corp vs. Galiano Gold | Alcoa Corp vs. GoldMining |
| Lig Assets vs. Beyond Commerce | Lig Assets vs. Baosheng Media Group | Lig Assets vs. MGO Global Common | Lig Assets vs. CMG Holdings Group |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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