Correlation Between Alcoa Corp and MYLAN
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By analyzing existing cross correlation between Alcoa Corp and MYLAN N V, you can compare the effects of market volatilities on Alcoa Corp and MYLAN 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 MYLAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and MYLAN.
Diversification Opportunities for Alcoa Corp and MYLAN
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alcoa and MYLAN is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and MYLAN N V in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYLAN N V 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 MYLAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYLAN N V has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and MYLAN go up and down completely randomly.
Pair Corralation between Alcoa Corp and MYLAN
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 0.85 times more return on investment than MYLAN. However, Alcoa Corp is 1.17 times less risky than MYLAN. It trades about 0.22 of its potential returns per unit of risk. MYLAN N V is currently generating about -0.12 per unit of risk. If you would invest 4,131 in Alcoa Corp on August 28, 2024 and sell it today you would earn a total of 591.00 from holding Alcoa Corp or generate 14.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alcoa Corp vs. MYLAN N V
Performance |
| Timeline |
| Alcoa Corp |
| MYLAN N V |
Alcoa Corp and MYLAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and MYLAN
The main advantage of trading using opposite Alcoa Corp and MYLAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, MYLAN 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 MYLAN will offset losses from the drop in MYLAN's long position.The idea behind Alcoa Corp and MYLAN N V 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.| MYLAN vs. Thor Industries | MYLAN vs. Marine Products | MYLAN vs. Amkor Technology | MYLAN vs. Wabash National |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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