Correlation Between Alcoa Corp and Ternium SA
Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Ternium SA 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 Ternium SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and Ternium SA ADR, you can compare the effects of market volatilities on Alcoa Corp and Ternium SA 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 Ternium SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Ternium SA.
Diversification Opportunities for Alcoa Corp and Ternium SA
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alcoa and Ternium is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Ternium SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ternium SA ADR 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 Ternium SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ternium SA ADR has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Ternium SA go up and down completely randomly.
Pair Corralation between Alcoa Corp and Ternium SA
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 1.35 times less return on investment than Ternium SA. In addition to that, Alcoa Corp is 1.55 times more volatile than Ternium SA ADR. It trades about 0.08 of its total potential returns per unit of risk. Ternium SA ADR is currently generating about 0.16 per unit of volatility. If you would invest 2,912 in Ternium SA ADR on June 9, 2025 and sell it today you would earn a total of 546.00 from holding Ternium SA ADR or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alcoa Corp vs. Ternium SA ADR
Performance |
| Timeline |
| Alcoa Corp |
| Ternium SA ADR |
Alcoa Corp and Ternium SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and Ternium SA
The main advantage of trading using opposite Alcoa Corp and Ternium SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Ternium SA 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 Ternium SA will offset losses from the drop in Ternium SA's long position.| Alcoa Corp vs. AngloGold Ashanti plc | Alcoa Corp vs. Celanese | Alcoa Corp vs. Dakota Gold Corp | Alcoa Corp vs. Ivanhoe Electric |
| Ternium SA vs. ArcelorMittal SA ADR | Ternium SA vs. Gerdau SA ADR | Ternium SA vs. Metallus, | Ternium SA vs. POSCO Holdings |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |