Correlation Between Alcoa Corp and SPDR SSGA
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and SPDR SSGA 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 SPDR SSGA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and SPDR SSGA Small, you can compare the effects of market volatilities on Alcoa Corp and SPDR SSGA 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 SPDR SSGA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and SPDR SSGA.
Diversification Opportunities for Alcoa Corp and SPDR SSGA
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alcoa and SPDR is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and SPDR SSGA Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA Small 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 SPDR SSGA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSGA Small has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and SPDR SSGA go up and down completely randomly.
Pair Corralation between Alcoa Corp and SPDR SSGA
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 2.28 times more return on investment than SPDR SSGA. However, Alcoa Corp is 2.28 times more volatile than SPDR SSGA Small. It trades about 0.12 of its potential returns per unit of risk. SPDR SSGA Small is currently generating about 0.11 per unit of risk. If you would invest 2,668 in Alcoa Corp on May 30, 2025 and sell it today you would earn a total of 512.00 from holding Alcoa Corp or generate 19.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
Alcoa Corp vs. SPDR SSGA Small
Performance |
| Timeline |
| Alcoa Corp |
| SPDR SSGA Small |
Alcoa Corp and SPDR SSGA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and SPDR SSGA
The main advantage of trading using opposite Alcoa Corp and SPDR SSGA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, SPDR SSGA 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 SPDR SSGA will offset losses from the drop in SPDR SSGA's long position.| Alcoa Corp vs. Gold Resource | Alcoa Corp vs. McEwen Mining | Alcoa Corp vs. Paramount Gold Nevada | Alcoa Corp vs. Vista Gold |
| SPDR SSGA vs. SPDR SSGA Large | SPDR SSGA vs. Invesco SP SmallCap | SPDR SSGA vs. Invesco SP MidCap | SPDR SSGA vs. SPDR MSCI EAFE |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |