Correlation Between Alcoa Corp and Murphy
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By analyzing existing cross correlation between Alcoa Corp and Murphy Oil Corp, you can compare the effects of market volatilities on Alcoa Corp and Murphy 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 Murphy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Murphy.
Diversification Opportunities for Alcoa Corp and Murphy
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alcoa and Murphy is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Murphy Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Murphy Oil Corp 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 Murphy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Murphy Oil Corp has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Murphy go up and down completely randomly.
Pair Corralation between Alcoa Corp and Murphy
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 3.36 times more return on investment than Murphy. However, Alcoa Corp is 3.36 times more volatile than Murphy Oil Corp. It trades about 0.01 of its potential returns per unit of risk. Murphy Oil Corp is currently generating about 0.0 per unit of risk. If you would invest 5,081 in Alcoa Corp on August 27, 2024 and sell it today you would lose (534.00) from holding Alcoa Corp or give up 10.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 92.75% |
| Values | Daily Returns |
Alcoa Corp vs. Murphy Oil Corp
Performance |
| Timeline |
| Alcoa Corp |
| Murphy Oil Corp |
Alcoa Corp and Murphy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and Murphy
The main advantage of trading using opposite Alcoa Corp and Murphy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Murphy 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 Murphy will offset losses from the drop in Murphy's long position.The idea behind Alcoa Corp and Murphy Oil Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Murphy vs. The Coca Cola | Murphy vs. JPMorgan Chase Co | Murphy vs. Dupont De Nemours | Murphy vs. Alcoa Corp |
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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