Correlation Between Wirtek AS and Alcoa Corp
Can any of the company-specific risk be diversified away by investing in both Wirtek AS 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 Wirtek AS and Alcoa Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wirtek AS and Alcoa Corp, you can compare the effects of market volatilities on Wirtek AS 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 Wirtek AS with a short position of Alcoa Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wirtek AS and Alcoa Corp.
Diversification Opportunities for Wirtek AS and Alcoa Corp
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wirtek and Alcoa is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Wirtek AS and Alcoa Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcoa Corp and Wirtek AS 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 Wirtek AS 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 Wirtek AS i.e., Wirtek AS and Alcoa Corp go up and down completely randomly.
Pair Corralation between Wirtek AS and Alcoa Corp
Assuming the 90 days trading horizon Wirtek AS is expected to generate 1.82 times less return on investment than Alcoa Corp. In addition to that, Wirtek AS is 1.17 times more volatile than Alcoa Corp. It trades about 0.13 of its total potential returns per unit of risk. Alcoa Corp is currently generating about 0.28 per unit of volatility. If you would invest 3,158 in Alcoa Corp on January 26, 2024 and sell it today you would earn a total of 450.00 from holding Alcoa Corp or generate 14.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Wirtek AS vs. Alcoa Corp
Performance |
| Timeline |
| Wirtek AS |
| Alcoa Corp |
Wirtek AS and Alcoa Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wirtek AS and Alcoa Corp
The main advantage of trading using opposite Wirtek AS and Alcoa Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wirtek AS 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.| Wirtek AS vs. ChemoMetec AS | Wirtek AS vs. Ambu AS | Wirtek AS vs. Genmab AS | Wirtek AS vs. Zealand Pharma AS |
| Alcoa Corp vs. Constellium Nv | Alcoa Corp vs. Century Aluminum | Alcoa Corp vs. China Hongqiao Group | Alcoa Corp vs. Kaiser Aluminum |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |