Correlation Between Alcoa Corp and NETAPP
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By analyzing existing cross correlation between Alcoa Corp and NETAPP INC, you can compare the effects of market volatilities on Alcoa Corp and NETAPP 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 NETAPP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and NETAPP.
Diversification Opportunities for Alcoa Corp and NETAPP
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alcoa and NETAPP is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and NETAPP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETAPP INC 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 NETAPP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETAPP INC has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and NETAPP go up and down completely randomly.
Pair Corralation between Alcoa Corp and NETAPP
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 1.99 times more return on investment than NETAPP. However, Alcoa Corp is 1.99 times more volatile than NETAPP INC. It trades about 0.17 of its potential returns per unit of risk. NETAPP INC is currently generating about -0.15 per unit of risk. If you would invest 4,131 in Alcoa Corp on August 27, 2024 and sell it today you would earn a total of 416.00 from holding Alcoa Corp or generate 10.07% 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. NETAPP INC
Performance |
| Timeline |
| Alcoa Corp |
| NETAPP INC |
Alcoa Corp and NETAPP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and NETAPP
The main advantage of trading using opposite Alcoa Corp and NETAPP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, NETAPP 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 NETAPP will offset losses from the drop in NETAPP's long position.The idea behind Alcoa Corp and NETAPP INC 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.| NETAPP vs. Dave Busters Entertainment | NETAPP vs. Boyd Gaming | NETAPP vs. GEN Restaurant Group, | NETAPP vs. Precision Drilling |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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