Correlation Between Alcoa Corp and Oakmark Fund

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Can any of the company-specific risk be diversified away by investing in both Alcoa Corp and Oakmark Fund 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 Oakmark Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcoa Corp and Oakmark Fund Advisor, you can compare the effects of market volatilities on Alcoa Corp and Oakmark Fund 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 Oakmark Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and Oakmark Fund.

Diversification Opportunities for Alcoa Corp and Oakmark Fund

  Correlation Coefficient

Very poor diversification

The 3 months correlation between Alcoa and Oakmark is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and Oakmark Fund Advisor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Fund Advisor 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 Oakmark Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Fund Advisor has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and Oakmark Fund go up and down completely randomly.

Pair Corralation between Alcoa Corp and Oakmark Fund

Allowing for the 90-day total investment horizon Alcoa Corp is expected to under-perform the Oakmark Fund. In addition to that, Alcoa Corp is 2.47 times more volatile than Oakmark Fund Advisor. It trades about -0.35 of its total potential returns per unit of risk. Oakmark Fund Advisor is currently generating about -0.27 per unit of volatility. If you would invest  10,363  in Oakmark Fund Advisor on July 3, 2022 and sell it today you would lose (990.00)  from holding Oakmark Fund Advisor or give up 9.55% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Alcoa Corp  vs.  Oakmark Fund Advisor

 Performance (%) 
Alcoa Corp 
Alcoa Performance
0 of 100
Over the last 90 days Alcoa Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in November 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Alcoa Price Channel

Oakmark Fund Advisor 
Oakmark Performance
0 of 100
Over the last 90 days Oakmark Fund Advisor has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Oakmark Fund is not utilizing all of its potentials. The new stock price disturbance, may contribute to short-term losses for the investors.

Oakmark Price Channel

Alcoa Corp and Oakmark Fund Volatility Contrast

   Predicted Return Density   

Pair Trading with Alcoa Corp and Oakmark Fund

The main advantage of trading using opposite Alcoa Corp and Oakmark Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, Oakmark Fund 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 Oakmark Fund will offset losses from the drop in Oakmark Fund's long position.
Alcoa Corp vs. Amazon Inc
The idea behind Alcoa Corp and Oakmark Fund Advisor pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Shere Portfolio module to track or share privately all of your investments from the convenience of any device.

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