Correlation Between Alcoa Corp and AETNA
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By analyzing existing cross correlation between Alcoa Corp and AETNA INC NEW, you can compare the effects of market volatilities on Alcoa Corp and AETNA 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 AETNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and AETNA.
Diversification Opportunities for Alcoa Corp and AETNA
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alcoa and AETNA is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and AETNA INC NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AETNA INC NEW 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 AETNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AETNA INC NEW has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and AETNA go up and down completely randomly.
Pair Corralation between Alcoa Corp and AETNA
Allowing for the 90-day total investment horizon Alcoa Corp is expected to under-perform the AETNA. In addition to that, Alcoa Corp is 5.04 times more volatile than AETNA INC NEW. It trades about -0.05 of its total potential returns per unit of risk. AETNA INC NEW is currently generating about 0.06 per unit of volatility. If you would invest 10,639 in AETNA INC NEW on November 28, 2024 and sell it today you would earn a total of 70.00 from holding AETNA INC NEW or generate 0.66% 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. AETNA INC NEW
Performance |
| Timeline |
| Alcoa Corp |
| AETNA INC NEW |
Alcoa Corp and AETNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and AETNA
The main advantage of trading using opposite Alcoa Corp and AETNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, AETNA 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 AETNA will offset losses from the drop in AETNA's long position.| Alcoa Corp vs. Fortitude Gold Corp | Alcoa Corp vs. New Gold | Alcoa Corp vs. Galiano Gold | Alcoa Corp vs. GoldMining |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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