Correlation Between Alcoa Corp and Saint Jean
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Saint Jean 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 Saint Jean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and Saint Jean Carbon, you can compare the effects of market volatilities on Alcoa Corp and Saint Jean 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 Saint Jean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Saint Jean.
Diversification Opportunities for Alcoa Corp and Saint Jean
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alcoa and Saint is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Saint Jean Carbon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saint Jean Carbon 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 Saint Jean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saint Jean Carbon has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Saint Jean go up and down completely randomly.
Pair Corralation between Alcoa Corp and Saint Jean
Allowing for the 90-day total investment horizon Alcoa Corp is expected to under-perform the Saint Jean. But the stock apears to be less risky and, when comparing its historical volatility, Alcoa Corp is 8.25 times less risky than Saint Jean. The stock trades about -0.19 of its potential returns per unit of risk. The Saint Jean Carbon is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1.92 in Saint Jean Carbon on December 1, 2024 and sell it today you would lose (0.06) from holding Saint Jean Carbon or give up 3.13% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.36% |
Values | Daily Returns |
Alcoa Corp vs. Saint Jean Carbon
Performance |
Timeline |
Alcoa Corp |
Saint Jean Carbon |
Alcoa Corp and Saint Jean Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alcoa Corp and Saint Jean
The main advantage of trading using opposite Alcoa Corp and Saint Jean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Saint Jean 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 Saint Jean will offset losses from the drop in Saint Jean's long position.Alcoa Corp vs. Fortitude Gold Corp | Alcoa Corp vs. New Gold | Alcoa Corp vs. Galiano Gold | Alcoa Corp vs. GoldMining |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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