Correlation Between Alcoa Corp and Teb Bancorp
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Teb Bancorp 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 Teb Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and Teb Bancorp, you can compare the effects of market volatilities on Alcoa Corp and Teb Bancorp 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 Teb Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Teb Bancorp.
Diversification Opportunities for Alcoa Corp and Teb Bancorp
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alcoa and Teb is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Teb Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teb Bancorp 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 Teb Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teb Bancorp has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Teb Bancorp go up and down completely randomly.
Pair Corralation between Alcoa Corp and Teb Bancorp
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 0.58 times more return on investment than Teb Bancorp. However, Alcoa Corp is 1.71 times less risky than Teb Bancorp. It trades about 0.0 of its potential returns per unit of risk. Teb Bancorp is currently generating about -0.02 per unit of risk. If you would invest 3,649 in Alcoa Corp on November 7, 2024 and sell it today you would lose (25.00) from holding Alcoa Corp or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Alcoa Corp vs. Teb Bancorp
Performance |
| Timeline |
| Alcoa Corp |
| Teb Bancorp |
Alcoa Corp and Teb Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and Teb Bancorp
The main advantage of trading using opposite Alcoa Corp and Teb Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Teb Bancorp 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 Teb Bancorp will offset losses from the drop in Teb Bancorp's long position.| Alcoa Corp vs. Agnico Eagle Mines | Alcoa Corp vs. Pan American Silver | Alcoa Corp vs. Wheaton Precious Metals | Alcoa Corp vs. Kinross Gold |
| Teb Bancorp vs. Sound Financial Bancorp | Teb Bancorp vs. Finward Bancorp | Teb Bancorp vs. Franklin Financial Services | Teb Bancorp vs. Community West Bancshares |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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