Correlation Between Calibre Mining and Alcoa Corp
Can any of the company-specific risk be diversified away by investing in both Calibre Mining and Alcoa Corp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Calibre Mining and Alcoa Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calibre Mining Corp and Alcoa Corp, you can compare the effects of market volatilities on Calibre Mining and Alcoa Corp 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 Calibre Mining with a short position of Alcoa Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calibre Mining and Alcoa Corp.
Diversification Opportunities for Calibre Mining and Alcoa Corp
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Calibre and Alcoa is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and Alcoa Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcoa Corp and Calibre Mining 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 Calibre Mining Corp are associated (or correlated) with Alcoa Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcoa Corp has no effect on the direction of Calibre Mining i.e., Calibre Mining and Alcoa Corp go up and down completely randomly.
Pair Corralation between Calibre Mining and Alcoa Corp
Assuming the 90 days trading horizon Calibre Mining is expected to generate 4.36 times less return on investment than Alcoa Corp. But when comparing it to its historical volatility, Calibre Mining Corp is 1.43 times less risky than Alcoa Corp. It trades about 0.06 of its potential returns per unit of risk. Alcoa Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,059 in Alcoa Corp on August 28, 2024 and sell it today you would earn a total of 1,441 from holding Alcoa Corp or generate 47.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calibre Mining Corp vs. Alcoa Corp
Performance |
| Timeline |
| Calibre Mining Corp |
| Alcoa Corp |
Calibre Mining and Alcoa Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calibre Mining and Alcoa Corp
The main advantage of trading using opposite Calibre Mining and Alcoa Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calibre Mining position performs unexpectedly, Alcoa Corp 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 Alcoa Corp will offset losses from the drop in Alcoa Corp's long position.| Calibre Mining vs. Apple Inc | Calibre Mining vs. Apple Inc | Calibre Mining vs. Apple Inc | Calibre Mining vs. Apple Inc |
| Alcoa Corp vs. 24SEVENOFFICE GROUP AB | Alcoa Corp vs. SHIP HEALTHCARE HLDGINC | Alcoa Corp vs. Calibre Mining Corp | Alcoa Corp vs. Coeur Mining |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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