Correlation Analysis Between Aluminum and Alcoa

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

Aluminum of China  
00

Risk-Adjusted Performance

Over the last 30 days Aluminum Corporation of China L has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Aluminum is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholder.
Alcoa  
00

Risk-Adjusted Performance

Over the last 30 days Alcoa Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Alcoa is not utilizing all of its potentials. The prevalent stock price disturbance, may contribute to short term losses for the investors.

Aluminum and Alcoa Volatility Contrast

 Predicted Return Density 
      Returns 

Aluminum Corp. of China L  vs.  Alcoa Corp.

 Performance (%) 
      Timeline 

Pair Volatility

Considering 30-days investment horizon, Aluminum Corporation of China L is expected to under-perform the Alcoa. But the stock apears to be less risky and, when comparing its historical volatility, Aluminum Corporation of China L is 1.42 times less risky than Alcoa. The stock trades about -0.03 of its potential returns per unit of risk. The Alcoa Corporation is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,260  in Alcoa Corporation on August 20, 2019 and sell it today you would lose (93.00)  from holding Alcoa Corporation or give up 4.12% of portfolio value over 30 days.

Pair Corralation between Aluminum and Alcoa

0.87
Time Period3 Months [change]
DirectionPositive 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Aluminum and Alcoa

Aluminum Corp. of China L diversification synergy

Very poor diversification

Overlapping area represents the amount of risk that can be diversified away by holding Aluminum Corp. of China L and Alcoa Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Alcoa and Aluminum 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 Aluminum Corporation of China L are associated (or correlated) with Alcoa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcoa has no effect on the direction of Aluminum i.e. Aluminum and Alcoa go up and down completely randomly.
See also your portfolio center. Please also try Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.


 
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