Correlation Between Alcoa Corp and Macys
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Macys 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 Macys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and Macys Inc, you can compare the effects of market volatilities on Alcoa Corp and Macys 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 Macys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Macys.
Diversification Opportunities for Alcoa Corp and Macys
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alcoa and Macys is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Macys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macys Inc 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 Macys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macys Inc has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Macys go up and down completely randomly.
Pair Corralation between Alcoa Corp and Macys
Allowing for the 90-day total investment horizon Alcoa Corp is expected to under-perform the Macys. In addition to that, Alcoa Corp is 1.04 times more volatile than Macys Inc. It trades about -0.01 of its total potential returns per unit of risk. Macys Inc is currently generating about 0.01 per unit of volatility. If you would invest 2,146 in Macys Inc on January 26, 2024 and sell it today you would lose (273.00) from holding Macys Inc or give up 12.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alcoa Corp vs. Macys Inc
Performance |
| Timeline |
| Alcoa Corp |
| Macys Inc |
Alcoa Corp and Macys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and Macys
The main advantage of trading using opposite Alcoa Corp and Macys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Macys 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 Macys will offset losses from the drop in Macys' long position.| Alcoa Corp vs. Constellium Nv | Alcoa Corp vs. Century Aluminum | Alcoa Corp vs. China Hongqiao Group | Alcoa Corp vs. Kaiser Aluminum |
| Macys vs. Marks Spencer Group | Macys vs. Marks and Spencer | Macys vs. Dillards Capital Trust | Macys vs. Companhia Brasileira de |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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