Correlation Between Alcoa Corp and Julius Bär

Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Julius Bär 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 Alcoa Corp and Julius Bär into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alcoa Corp and Julius Br Gruppe, you can compare the effects of market volatilities on Alcoa Corp and Julius Bär 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 Julius Bär. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Julius Bär.

Diversification Opportunities for Alcoa Corp and Julius Bär

0.75

Correlation Coefficient

Alcoa Corp  Julius Bär

Poor diversification

The 3 months correlation between Alcoa and Julius is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Julius Br Gruppe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Julius Br Gruppe 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 Julius Bär. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Julius Br Gruppe has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Julius Bär go up and down completely randomly.

Pair Corralation between Alcoa Corp and Julius Bär

Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 1.18 times more return on investment than Julius Bär. However, Alcoa Corp is 1.18 times more volatile than Julius Br Gruppe. It trades about 0.2 of its potential returns per unit of risk. Julius Br Gruppe is currently generating about 0.13 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  532.00  from holding Alcoa Corp or generate 13.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Alcoa Corp  vs.  Julius Br Gruppe

Alcoa Corp

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alcoa Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat sluggish basic indicators, Alcoa Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Julius Br Gruppe

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Julius Br Gruppe are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Julius Bär reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alcoa Corp and Julius Bär

The main advantage of trading using opposite Alcoa Corp and Julius Bär positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Julius Bär 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 Julius Bär will offset losses from the drop in Julius Bär's long position.

The idea behind Alcoa Corp and Julius Br Gruppe 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.

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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.