Correlation Between Aluminum and Constellium
Can any of the company-specific risk be diversified away by investing in both Aluminum and Constellium 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 Aluminum and Constellium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum and Constellium Nv, you can compare the effects of market volatilities on Aluminum and Constellium 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 Aluminum with a short position of Constellium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminum and Constellium.
Diversification Opportunities for Aluminum and Constellium
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aluminum and Constellium is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum and Constellium Nv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellium Nv and 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 Aluminum are associated (or correlated) with Constellium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellium Nv has no effect on the direction of Aluminum i.e., Aluminum and Constellium go up and down completely randomly.
Pair Corralation between Aluminum and Constellium
If you would invest 1,255 in Aluminum on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Aluminum or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 1.59% |
| Values | Daily Returns |
Aluminum vs. Constellium Nv
Performance |
| Timeline |
| Aluminum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Constellium Nv |
Aluminum and Constellium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminum and Constellium
The main advantage of trading using opposite Aluminum and Constellium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminum position performs unexpectedly, Constellium 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 Constellium will offset losses from the drop in Constellium's long position.| Aluminum vs. Anhui Conch Cement | Aluminum vs. Nippon Steel Corp | Aluminum vs. Anhui Conch Cement | Aluminum vs. Anglo American plc |
| Constellium vs. Century Aluminum | Constellium vs. Alcoa Corp | Constellium vs. China Hongqiao Group | Constellium vs. Norsk Hydro ASA |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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