Correlation Between Alcoa Corp and Cetus Capital

Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Cetus Capital 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 Alcoa Corp and Cetus Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alcoa Corp and Cetus Capital Acquisition, you can compare the effects of market volatilities on Alcoa Corp and Cetus Capital 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 Corp with a short position of Cetus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Cetus Capital.

Diversification Opportunities for Alcoa Corp and Cetus Capital

-0.47

Correlation Coefficient

Alcoa Corp  Cetus Capital

Very good diversification

The 3 months correlation between Alcoa and Cetus is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Cetus Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cetus Capital Acquisition and Alcoa Corp 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 Corp are associated (or correlated) with Cetus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cetus Capital Acquisition has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Cetus Capital go up and down completely randomly.

Pair Corralation between Alcoa Corp and Cetus Capital

If you would invest  1,141  in Cetus Capital Acquisition on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Cetus Capital Acquisition or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.0%
Values	Daily Returns

Alcoa Corp  vs.  Cetus Capital Acquisition

Alcoa Corp

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alcoa Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Alcoa Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Cetus Capital Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cetus Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cetus Capital is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Alcoa Corp and Cetus Capital

The main advantage of trading using opposite Alcoa Corp and Cetus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Cetus Capital 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 Cetus Capital will offset losses from the drop in Cetus Capital's long position.

The idea behind Alcoa Corp and Cetus Capital Acquisition 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.