Correlation Between Aluminum and SERI INDUSTRIAL
Can any of the company-specific risk be diversified away by investing in both Aluminum and SERI INDUSTRIAL 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 SERI INDUSTRIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and SERI INDUSTRIAL EO, you can compare the effects of market volatilities on Aluminum and SERI INDUSTRIAL 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 SERI INDUSTRIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminum and SERI INDUSTRIAL.
Diversification Opportunities for Aluminum and SERI INDUSTRIAL
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aluminum and SERI is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and SERI INDUSTRIAL EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SERI INDUSTRIAL EO 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 of are associated (or correlated) with SERI INDUSTRIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SERI INDUSTRIAL EO has no effect on the direction of Aluminum i.e., Aluminum and SERI INDUSTRIAL go up and down completely randomly.
Pair Corralation between Aluminum and SERI INDUSTRIAL
Assuming the 90 days horizon Aluminum of is expected to generate 0.93 times more return on investment than SERI INDUSTRIAL. However, Aluminum of is 1.07 times less risky than SERI INDUSTRIAL. It trades about 0.06 of its potential returns per unit of risk. SERI INDUSTRIAL EO is currently generating about -0.04 per unit of risk. If you would invest 31.00 in Aluminum of on October 27, 2024 and sell it today you would earn a total of 32.00 from holding Aluminum of or generate 103.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aluminum of vs. SERI INDUSTRIAL EO
Performance |
| Timeline |
| Aluminum |
| SERI INDUSTRIAL EO |
Aluminum and SERI INDUSTRIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminum and SERI INDUSTRIAL
The main advantage of trading using opposite Aluminum and SERI INDUSTRIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminum position performs unexpectedly, SERI INDUSTRIAL 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 SERI INDUSTRIAL will offset losses from the drop in SERI INDUSTRIAL's long position.| Aluminum vs. Mitsubishi Materials | Aluminum vs. Materialise NV | Aluminum vs. MHP Hotel AG | Aluminum vs. Sumitomo Rubber Industries |
| SERI INDUSTRIAL vs. Transport International Holdings | SERI INDUSTRIAL vs. SCIENCE IN SPORT | SERI INDUSTRIAL vs. Magnachip Semiconductor | SERI INDUSTRIAL vs. Nordic Semiconductor 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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