Correlation Between Alcoa Corp and Oklahoma College

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

By analyzing existing cross correlation between Alcoa Corp and Oklahoma College Savings, you can compare the effects of market volatilities on Alcoa Corp and Oklahoma College 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 Oklahoma College. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Oklahoma College.

Diversification Opportunities for Alcoa Corp and Oklahoma College

0.46

Correlation Coefficient

Alcoa Corp  Oklahoma College

Very weak diversification

The 3 months correlation between Alcoa and Oklahoma is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Oklahoma College Savings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oklahoma College Savings 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 Oklahoma College. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oklahoma College Savings has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Oklahoma College go up and down completely randomly.

Pair Corralation between Alcoa Corp and Oklahoma College

Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 1.65 times less return on investment than Oklahoma College. In addition to that, Alcoa Corp is 2.6 times more volatile than Oklahoma College Savings. It trades about 0.03 of its total potential returns per unit of risk. Oklahoma College Savings is currently generating about 0.13 per unit of volatility. If you would invest  1,537  in Oklahoma College Savings on September 24, 2024 and sell it today you would earn a total of  142.00  from holding Oklahoma College Savings or generate 9.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Alcoa Corp  vs.  Oklahoma College Savings

Alcoa Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alcoa Corp are ranked lower than 2 (%) 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 recent stock price disturbance, may contribute to short-term losses for the investors.

Oklahoma College Savings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oklahoma College Savings are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Oklahoma College may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Alcoa Corp and Oklahoma College

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

The idea behind Alcoa Corp and Oklahoma College Savings 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.