Correlation Between Vincit Oyj and Alcoa

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

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

Diversification Opportunities for Vincit Oyj and Alcoa

-0.18
  Correlation Coefficient
Vincit Oyj
Alcoa

Good diversification

The 3 months correlation between Vincit and Alcoa is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Vincit Oyj and Alcoa Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Alcoa and Vincit Oyj 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 Vincit Oyj 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 Vincit Oyj i.e. Vincit Oyj and Alcoa go up and down completely randomly.

Pair Corralation between Vincit Oyj and Alcoa

Assuming the 30-days trading horizon, Vincit Oyj is expected to generate 1.11 times more return on investment than Alcoa. However, Vincit Oyj is 1.11 times more volatile than Alcoa. It trades about 0.26 of its potential returns per unit of risk. Alcoa is currently generating about 0.2 per unit of risk. If you would invest  357.00  in Vincit Oyj on June 15, 2020 and sell it today you would earn a total of  82.00  from holding Vincit Oyj or generate 22.97% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy22.58%
ValuesDaily Returns

Vincit Oyj  vs.  Alcoa Corp.

 Performance (%) 
      Timeline 
Vincit Oyj 
00

Vincit Oyj Risk-Adjusted Performance

Over the last 30 days Vincit Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak forward indicators, Vincit Oyj sustained solid returns over the last few months and may actually be approaching a breakup point.
Alcoa 
1313

Alcoa Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Alcoa are ranked lower than 13 (%) of all global equities and portfolios over the last 30 days. Despite somewhat unfluctuating basic indicators, Alcoa sustained solid returns over the last few months and may actually be approaching a breakup point.

Vincit Oyj and Alcoa Volatility Contrast

 Predicted Return Density 
      Returns 
Check out your portfolio center. Please also try Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.


 
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