Correlation Between Alcoa Corp and Lixte Biotechnology
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Lixte Biotechnology 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 Lixte Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and Lixte Biotechnology Holdings, you can compare the effects of market volatilities on Alcoa Corp and Lixte Biotechnology 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 Lixte Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Lixte Biotechnology.
Diversification Opportunities for Alcoa Corp and Lixte Biotechnology
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alcoa and Lixte is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Lixte Biotechnology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lixte Biotechnology 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 Lixte Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lixte Biotechnology has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Lixte Biotechnology go up and down completely randomly.
Pair Corralation between Alcoa Corp and Lixte Biotechnology
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 5.11 times less return on investment than Lixte Biotechnology. But when comparing it to its historical volatility, Alcoa Corp is 3.3 times less risky than Lixte Biotechnology. It trades about 0.05 of its potential returns per unit of risk. Lixte Biotechnology Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 181.00 in Lixte Biotechnology Holdings on October 24, 2024 and sell it today you would earn a total of 52.00 from holding Lixte Biotechnology Holdings or generate 28.73% 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. Lixte Biotechnology Holdings
Performance |
| Timeline |
| Alcoa Corp |
| Lixte Biotechnology |
Alcoa Corp and Lixte Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and Lixte Biotechnology
The main advantage of trading using opposite Alcoa Corp and Lixte Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Lixte Biotechnology 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 Lixte Biotechnology will offset losses from the drop in Lixte Biotechnology's long position.| Alcoa Corp vs. Constellium Nv | Alcoa Corp vs. Century Aluminum | Alcoa Corp vs. China Hongqiao Group | Alcoa Corp vs. Kaiser Aluminum |
| Lixte Biotechnology vs. Allarity Therapeutics | Lixte Biotechnology vs. Virax Biolabs Group | Lixte Biotechnology vs. Quoin Pharmaceuticals Ltd | Lixte Biotechnology vs. Indaptus Therapeutics |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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