Correlation Between Lollands Bank and Alcoa Corp

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Lollands Bank 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 Lollands Bank and Alcoa Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lollands Bank and Alcoa Corp, you can compare the effects of market volatilities on Lollands Bank 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 Lollands Bank with a short position of Alcoa Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lollands Bank and Alcoa Corp.

Diversification Opportunities for Lollands Bank and Alcoa Corp

-0.49
  Correlation Coefficient

Very good diversification

The 3 months correlation between Lollands and Alcoa is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lollands Bank and Alcoa Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcoa Corp and Lollands Bank 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 Lollands Bank 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 Lollands Bank i.e., Lollands Bank and Alcoa Corp go up and down completely randomly.

Pair Corralation between Lollands Bank and Alcoa Corp

Assuming the 90 days trading horizon Lollands Bank is expected to generate 0.47 times more return on investment than Alcoa Corp. However, Lollands Bank is 2.15 times less risky than Alcoa Corp. It trades about 0.0 of its potential returns per unit of risk. Alcoa Corp is currently generating about -0.03 per unit of risk. If you would invest  59,879  in Lollands Bank on December 30, 2023 and sell it today you would lose (1,879) from holding Lollands Bank or give up 3.14% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy99.8%
ValuesDaily Returns

Lollands Bank  vs.  Alcoa Corp

 Performance 
       Timeline  
Lollands Bank 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Lollands Bank are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Lollands Bank is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.
Alcoa Corp 

Risk-Adjusted Performance

1 of 100

 
Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Alcoa Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Alcoa Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lollands Bank and Alcoa Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lollands Bank and Alcoa Corp

The main advantage of trading using opposite Lollands Bank and Alcoa Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lollands Bank 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 Lollands Bank 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

Other Complementary Tools

Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
FinTech Suite
Use AI to screen and filter profitable investment opportunities
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments