Correlation Between Century Aluminum and Aluminum Corp
Can any of the company-specific risk be diversified away by investing in both Century Aluminum and Aluminum 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 Century Aluminum and Aluminum Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Aluminum and Aluminum Corp, you can compare the effects of market volatilities on Century Aluminum and Aluminum 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 Century Aluminum with a short position of Aluminum Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Aluminum and Aluminum Corp.
Diversification Opportunities for Century Aluminum and Aluminum Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Century and Aluminum is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Century Aluminum and Aluminum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminum Corp and Century Aluminum 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 Century Aluminum are associated (or correlated) with Aluminum Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminum Corp has no effect on the direction of Century Aluminum i.e., Century Aluminum and Aluminum Corp go up and down completely randomly.
Pair Corralation between Century Aluminum and Aluminum Corp
If you would invest 1,388 in Century Aluminum on January 25, 2024 and sell it today you would earn a total of 350.00 from holding Century Aluminum or generate 25.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Century Aluminum vs. Aluminum Corp
Performance |
| Timeline |
| Century Aluminum |
| Aluminum Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Century Aluminum and Aluminum Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Aluminum and Aluminum Corp
The main advantage of trading using opposite Century Aluminum and Aluminum Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Aluminum position performs unexpectedly, Aluminum 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 Aluminum Corp will offset losses from the drop in Aluminum Corp's long position.| Century Aluminum vs. Kaiser Aluminum | Century Aluminum vs. Commercial Metals | Century Aluminum vs. Steel Dynamics | Century Aluminum vs. Reliance Steel Aluminum |
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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 the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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