Correlation Between Alcoa Corp and KINDER
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By analyzing existing cross correlation between Alcoa Corp and KINDER MORGAN ENERGY, you can compare the effects of market volatilities on Alcoa Corp and KINDER 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 KINDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and KINDER.
Diversification Opportunities for Alcoa Corp and KINDER
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alcoa and KINDER is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and KINDER MORGAN ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINDER MORGAN ENERGY 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 KINDER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINDER MORGAN ENERGY has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and KINDER go up and down completely randomly.
Pair Corralation between Alcoa Corp and KINDER
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 61.47 times less return on investment than KINDER. But when comparing it to its historical volatility, Alcoa Corp is 29.36 times less risky than KINDER. It trades about 0.04 of its potential returns per unit of risk. KINDER MORGAN ENERGY is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 10,780 in KINDER MORGAN ENERGY on August 31, 2024 and sell it today you would earn a total of 465.00 from holding KINDER MORGAN ENERGY or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.58% |
| Values | Daily Returns |
Alcoa Corp vs. KINDER MORGAN ENERGY
Performance |
| Timeline |
| Alcoa Corp |
| KINDER MORGAN ENERGY |
Alcoa Corp and KINDER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and KINDER
The main advantage of trading using opposite Alcoa Corp and KINDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, KINDER 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 KINDER will offset losses from the drop in KINDER'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 |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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