Correlation Between ITUS and Alcoa Corp
Can any of the company-specific risk be diversified away by investing in both ITUS 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 ITUS and Alcoa Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITUS Corporation and Alcoa Corp, you can compare the effects of market volatilities on ITUS 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 ITUS with a short position of Alcoa Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITUS and Alcoa Corp.
Diversification Opportunities for ITUS and Alcoa Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ITUS and Alcoa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ITUS Corp. and Alcoa Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcoa Corp and ITUS 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 ITUS Corporation 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 ITUS i.e., ITUS and Alcoa Corp go up and down completely randomly.
Pair Corralation between ITUS and Alcoa Corp
If you would invest 3,050 in Alcoa Corp on January 26, 2024 and sell it today you would earn a total of 558.00 from holding Alcoa Corp or generate 18.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
ITUS Corp. vs. Alcoa Corp
Performance |
Timeline |
ITUS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alcoa Corp |
ITUS and Alcoa Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ITUS and Alcoa Corp
The main advantage of trading using opposite ITUS and Alcoa Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITUS 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.The idea behind ITUS Corporation and Alcoa Corp 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.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |