Correlation Between Alcoa Corp and SUNOCO
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By analyzing existing cross correlation between Alcoa Corp and SUNOCO LOGISTICS PARTNERS, you can compare the effects of market volatilities on Alcoa Corp and SUNOCO 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 SUNOCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and SUNOCO.
Diversification Opportunities for Alcoa Corp and SUNOCO
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alcoa and SUNOCO is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and SUNOCO LOGISTICS PARTNERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUNOCO LOGISTICS PARTNERS 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 SUNOCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUNOCO LOGISTICS PARTNERS has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and SUNOCO go up and down completely randomly.
Pair Corralation between Alcoa Corp and SUNOCO
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 12.54 times more return on investment than SUNOCO. However, Alcoa Corp is 12.54 times more volatile than SUNOCO LOGISTICS PARTNERS. It trades about 0.21 of its potential returns per unit of risk. SUNOCO LOGISTICS PARTNERS is currently generating about 0.03 per unit of risk. If you would invest 4,056 in Alcoa Corp on August 31, 2024 and sell it today you would earn a total of 587.00 from holding Alcoa Corp or generate 14.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Alcoa Corp vs. SUNOCO LOGISTICS PARTNERS
Performance |
| Timeline |
| Alcoa Corp |
| SUNOCO LOGISTICS PARTNERS |
Alcoa Corp and SUNOCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and SUNOCO
The main advantage of trading using opposite Alcoa Corp and SUNOCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, SUNOCO 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 SUNOCO will offset losses from the drop in SUNOCO'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 |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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