Correlation Between Anthem and Alcoa Corp
Can any of the company-specific risk be diversified away by investing in both Anthem 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 Anthem and Alcoa Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anthem Inc and Alcoa Corp, you can compare the effects of market volatilities on Anthem 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 Anthem with a short position of Alcoa Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anthem and Alcoa Corp.
Diversification Opportunities for Anthem and Alcoa Corp
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Anthem and Alcoa is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Anthem Inc and Alcoa Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcoa Corp and Anthem 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 Anthem Inc 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 Anthem i.e., Anthem and Alcoa Corp go up and down completely randomly.
Pair Corralation between Anthem and Alcoa Corp
If you would invest 3,439 in Alcoa Corp on January 24, 2024 and sell it today you would earn a total of 196.00 from holding Alcoa Corp or generate 5.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 0.54% |
Values | Daily Returns |
Anthem Inc vs. Alcoa Corp
Performance |
Timeline |
Anthem Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alcoa Corp |
Anthem and Alcoa Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Anthem and Alcoa Corp
The main advantage of trading using opposite Anthem and Alcoa Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anthem 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.Anthem vs. MYR Group | Anthem vs. CECO Environmental Corp | Anthem vs. RadNet Inc | Anthem vs. Shimmick Common |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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