Correlation Between Alcoa Corp and ProShares Short
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and ProShares Short 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 ProShares Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and ProShares Short Russell2000, you can compare the effects of market volatilities on Alcoa Corp and ProShares Short 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 ProShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and ProShares Short.
Diversification Opportunities for Alcoa Corp and ProShares Short
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alcoa and ProShares is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and ProShares Short Russell2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short Russ 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 ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short Russ has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and ProShares Short go up and down completely randomly.
Pair Corralation between Alcoa Corp and ProShares Short
Allowing for the 90-day total investment horizon Alcoa Corp is expected to under-perform the ProShares Short. In addition to that, Alcoa Corp is 1.96 times more volatile than ProShares Short Russell2000. It trades about -0.06 of its total potential returns per unit of risk. ProShares Short Russell2000 is currently generating about -0.01 per unit of volatility. If you would invest 2,017 in ProShares Short Russell2000 on March 17, 2025 and sell it today you would lose (49.00) from holding ProShares Short Russell2000 or give up 2.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alcoa Corp vs. ProShares Short Russell2000
Performance |
| Timeline |
| Alcoa Corp |
| ProShares Short Russ |
Alcoa Corp and ProShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and ProShares Short
The main advantage of trading using opposite Alcoa Corp and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, ProShares Short 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 ProShares Short will offset losses from the drop in ProShares Short's long position.| Alcoa Corp vs. Commercial Metals | Alcoa Corp vs. Steel Dynamics | Alcoa Corp vs. Gerdau SA ADR | Alcoa Corp vs. POSCO Holdings |
| ProShares Short vs. ProShares Short QQQ | ProShares Short vs. ProShares Short Dow30 | ProShares Short vs. ProShares Short MidCap400 | ProShares Short vs. ProShares UltraShort Russell2000 |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |