Correlation Between Alcoa Corp and China Gold
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and China Gold 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 China Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and China Gold International, you can compare the effects of market volatilities on Alcoa Corp and China Gold 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 China Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and China Gold.
Diversification Opportunities for Alcoa Corp and China Gold
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alcoa and China is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and China Gold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Gold International 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 China Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Gold International has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and China Gold go up and down completely randomly.
Pair Corralation between Alcoa Corp and China Gold
Allowing for the 90-day total investment horizon Alcoa Corp is expected to under-perform the China Gold. But the stock apears to be less risky and, when comparing its historical volatility, Alcoa Corp is 1.02 times less risky than China Gold. The stock trades about -0.06 of its potential returns per unit of risk. The China Gold International is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 476.00 in China Gold International on December 27, 2024 and sell it today you would earn a total of 195.00 from holding China Gold International or generate 40.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.36% |
Values | Daily Returns |
Alcoa Corp vs. China Gold International
Performance |
Timeline |
Alcoa Corp |
China Gold International |
Alcoa Corp and China Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alcoa Corp and China Gold
The main advantage of trading using opposite Alcoa Corp and China Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, China Gold 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 China Gold will offset losses from the drop in China Gold's long position.Alcoa Corp vs. Constellium Nv | Alcoa Corp vs. Century Aluminum | Alcoa Corp vs. China Hongqiao Group | Alcoa Corp vs. Kaiser Aluminum |
China Gold vs. Endeavour Silver Corp | China Gold vs. Metalla Royalty Streaming | China Gold vs. New Pacific Metals | China Gold vs. Hecla 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
FinTech Suite Use AI to screen and filter profitable investment opportunities |