Correlation Between Alcoa Corp and Timothy Plan
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Timothy Plan 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 Timothy Plan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and Timothy Plan , you can compare the effects of market volatilities on Alcoa Corp and Timothy Plan 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 Timothy Plan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Timothy Plan.
Diversification Opportunities for Alcoa Corp and Timothy Plan
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alcoa and Timothy is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Timothy Plan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan 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 Timothy Plan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Plan has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Timothy Plan go up and down completely randomly.
Pair Corralation between Alcoa Corp and Timothy Plan
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 5.68 times less return on investment than Timothy Plan. In addition to that, Alcoa Corp is 3.86 times more volatile than Timothy Plan . It trades about 0.01 of its total potential returns per unit of risk. Timothy Plan is currently generating about 0.22 per unit of volatility. If you would invest 2,585 in Timothy Plan on November 9, 2024 and sell it today you would earn a total of 83.00 from holding Timothy Plan or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alcoa Corp vs. Timothy Plan
Performance |
| Timeline |
| Alcoa Corp |
| Timothy Plan |
Alcoa Corp and Timothy Plan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and Timothy Plan
The main advantage of trading using opposite Alcoa Corp and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Timothy Plan 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 Timothy Plan will offset losses from the drop in Timothy Plan's long position.| Alcoa Corp vs. Constellium Nv | Alcoa Corp vs. Century Aluminum | Alcoa Corp vs. China Hongqiao Group | Alcoa Corp vs. Kaiser Aluminum |
| Timothy Plan vs. Timothy Plan | Timothy Plan vs. Timothy Plan LargeMid | Timothy Plan vs. Timothy Plan High | Timothy Plan vs. Timothy Plan Small |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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