Correlation Between Alcoa Corp and Macquarie ETF
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Macquarie ETF 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 Macquarie ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and Macquarie ETF Trust, you can compare the effects of market volatilities on Alcoa Corp and Macquarie ETF 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 Macquarie ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Macquarie ETF.
Diversification Opportunities for Alcoa Corp and Macquarie ETF
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alcoa and Macquarie is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Macquarie ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie ETF Trust 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 Macquarie ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie ETF Trust has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Macquarie ETF go up and down completely randomly.
Pair Corralation between Alcoa Corp and Macquarie ETF
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 2.25 times more return on investment than Macquarie ETF. However, Alcoa Corp is 2.25 times more volatile than Macquarie ETF Trust. It trades about 0.04 of its potential returns per unit of risk. Macquarie ETF Trust is currently generating about 0.05 per unit of risk. If you would invest 3,491 in Alcoa Corp on August 31, 2024 and sell it today you would earn a total of 1,152 from holding Alcoa Corp or generate 33.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 67.65% |
| Values | Daily Returns |
Alcoa Corp vs. Macquarie ETF Trust
Performance |
| Timeline |
| Alcoa Corp |
| Macquarie ETF Trust |
Alcoa Corp and Macquarie ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and Macquarie ETF
The main advantage of trading using opposite Alcoa Corp and Macquarie ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Macquarie ETF 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 Macquarie ETF will offset losses from the drop in Macquarie ETF's long position.| Alcoa Corp vs. RLJ Lodging Trust | Alcoa Corp vs. Aquagold International | Alcoa Corp vs. Stepstone Group | Alcoa Corp vs. Morningstar Unconstrained Allocation |
| Macquarie ETF vs. Freedom Day Dividend | Macquarie ETF vs. iShares MSCI China | Macquarie ETF vs. iShares Dividend and | Macquarie ETF vs. SmartETFs Dividend Builder |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |