Correlation Between Herbalife Nutrition and Alcoa Corp
Can any of the company-specific risk be diversified away by investing in both Herbalife Nutrition 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 Herbalife Nutrition and Alcoa Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herbalife Nutrition and Alcoa Corp, you can compare the effects of market volatilities on Herbalife Nutrition 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 Herbalife Nutrition with a short position of Alcoa Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herbalife Nutrition and Alcoa Corp.
Diversification Opportunities for Herbalife Nutrition and Alcoa Corp
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Herbalife and Alcoa is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Herbalife Nutrition and Alcoa Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcoa Corp and Herbalife Nutrition 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 Herbalife Nutrition 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 Herbalife Nutrition i.e., Herbalife Nutrition and Alcoa Corp go up and down completely randomly.
Pair Corralation between Herbalife Nutrition and Alcoa Corp
Considering the 90-day investment horizon Herbalife Nutrition is expected to under-perform the Alcoa Corp. In addition to that, Herbalife Nutrition is 1.87 times more volatile than Alcoa Corp. It trades about -0.01 of its total potential returns per unit of risk. Alcoa Corp is currently generating about 0.26 per unit of volatility. If you would invest 3,135 in Alcoa Corp on January 20, 2024 and sell it today you would earn a total of 412.00 from holding Alcoa Corp or generate 13.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Herbalife Nutrition vs. Alcoa Corp
Performance |
| Timeline |
| Herbalife Nutrition |
| Alcoa Corp |
Herbalife Nutrition and Alcoa Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herbalife Nutrition and Alcoa Corp
The main advantage of trading using opposite Herbalife Nutrition and Alcoa Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herbalife Nutrition 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.| Herbalife Nutrition vs. Seneca Foods Corp | Herbalife Nutrition vs. Central Garden Pet | Herbalife Nutrition vs. Central Garden Pet | Herbalife Nutrition vs. Lifeway Foods |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Stocks Directory Find actively traded stocks across global markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |