Correlation Between Alcoa Corp and Arcelormittal
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Arcelormittal 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 Arcelormittal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and Arcelormittal, you can compare the effects of market volatilities on Alcoa Corp and Arcelormittal 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 Arcelormittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Arcelormittal.
Diversification Opportunities for Alcoa Corp and Arcelormittal
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alcoa and Arcelormittal is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Arcelormittal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcelormittal 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 Arcelormittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcelormittal has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Arcelormittal go up and down completely randomly.
Pair Corralation between Alcoa Corp and Arcelormittal
If you would invest 4,096 in Alcoa Corp on August 30, 2024 and sell it today you would earn a total of 492.00 from holding Alcoa Corp or generate 12.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Alcoa Corp vs. Arcelormittal
Performance |
| Timeline |
| Alcoa Corp |
| Arcelormittal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alcoa Corp and Arcelormittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and Arcelormittal
The main advantage of trading using opposite Alcoa Corp and Arcelormittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Arcelormittal 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 Arcelormittal will offset losses from the drop in Arcelormittal'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 |
| Arcelormittal vs. Affiliated Managers Group | Arcelormittal vs. Maiden Holdings North | Arcelormittal vs. Credit Enhanced Corts | Arcelormittal vs. Affiliated Managers 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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