Correlation Analysis Between Alcoa and International Business

This module allows you to analyze existing cross correlation between Alcoa Corporation and International Business Machines. You can compare the effects of market volatilities on Alcoa and International Business 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 with a short position of International Business. See also your portfolio center. Please also check ongoing floating volatility patterns of Alcoa and International Business.
Horizon     30 Days    Login   to change
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Comparative Performance

Alcoa  
11

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Alcoa Corporation are ranked lower than 1 (%) of all global equities and portfolios over the last 30 days. Despite somewhat strong basic indicators, Alcoa is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short term losses for the investors.
International Business  
00

Risk-Adjusted Performance

Over the last 30 days International Business Machines has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's technical indicators remain steady and the new chaos on Wall Street may also be a sign of medium term gains for the business stakeholders.

Alcoa and International Business Volatility Contrast

 Predicted Return Density 
      Returns 

Alcoa Corp.  vs.  International Business Machine

 Performance (%) 
      Timeline 

Pair Volatility

Allowing for the 30-days total investment horizon, Alcoa Corporation is expected to generate 2.48 times more return on investment than International Business. However, Alcoa is 2.48 times more volatile than International Business Machines. It trades about 0.02 of its potential returns per unit of risk. International Business Machines is currently generating about -0.09 per unit of risk. If you would invest  2,030  in Alcoa Corporation on November 6, 2019 and sell it today you would earn a total of  30.00  from holding Alcoa Corporation or generate 1.48% return on investment over 30 days.

Pair Corralation between Alcoa and International Business

-0.04
Time Period3 Months [change]
DirectionNegative 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Alcoa and International Business

Alcoa Corp. diversification synergy

Good diversification

Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp. and International Business Machine in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on International Business and Alcoa 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 Corporation are associated (or correlated) with International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Alcoa i.e. Alcoa and International Business go up and down completely randomly.
See also your portfolio center. Please also try Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.


 
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