Correlation Between Alcoa Corp and SCCB
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and SCCB 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 SCCB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and SCCB, you can compare the effects of market volatilities on Alcoa Corp and SCCB 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 SCCB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and SCCB.
Diversification Opportunities for Alcoa Corp and SCCB
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alcoa and SCCB is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and SCCB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCCB 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 SCCB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCCB has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and SCCB go up and down completely randomly.
Pair Corralation between Alcoa Corp and SCCB
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 6.69 times more return on investment than SCCB. However, Alcoa Corp is 6.69 times more volatile than SCCB. It trades about 0.01 of its potential returns per unit of risk. SCCB is currently generating about 0.07 per unit of risk. If you would invest 4,910 in Alcoa Corp on August 31, 2024 and sell it today you would lose (267.00) from holding Alcoa Corp or give up 5.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 77.62% |
| Values | Daily Returns |
Alcoa Corp vs. SCCB
Performance |
| Timeline |
| Alcoa Corp |
| SCCB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alcoa Corp and SCCB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and SCCB
The main advantage of trading using opposite Alcoa Corp and SCCB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, SCCB 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 SCCB will offset losses from the drop in SCCB'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 |
| SCCB vs. Sachem Capital Corp | SCCB vs. Sachem Capital Corp | SCCB vs. B Riley Financial | SCCB vs. Eagle Point Credit |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |