Correlation Between Century Aluminum and AngloGold Ashanti
Can any of the company-specific risk be diversified away by investing in both Century Aluminum and AngloGold Ashanti 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 AngloGold Ashanti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Aluminum and AngloGold Ashanti plc, you can compare the effects of market volatilities on Century Aluminum and AngloGold Ashanti 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 AngloGold Ashanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Aluminum and AngloGold Ashanti.
Diversification Opportunities for Century Aluminum and AngloGold Ashanti
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Century and AngloGold is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Century Aluminum and AngloGold Ashanti plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngloGold Ashanti plc 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 AngloGold Ashanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AngloGold Ashanti plc has no effect on the direction of Century Aluminum i.e., Century Aluminum and AngloGold Ashanti go up and down completely randomly.
Pair Corralation between Century Aluminum and AngloGold Ashanti
Given the investment horizon of 90 days Century Aluminum is expected to generate 1.45 times more return on investment than AngloGold Ashanti. However, Century Aluminum is 1.45 times more volatile than AngloGold Ashanti plc. It trades about 0.07 of its potential returns per unit of risk. AngloGold Ashanti plc is currently generating about 0.04 per unit of risk. If you would invest 775.00 in Century Aluminum on August 30, 2024 and sell it today you would earn a total of 1,529 from holding Century Aluminum or generate 197.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Century Aluminum vs. AngloGold Ashanti plc
Performance |
| Timeline |
| Century Aluminum |
| AngloGold Ashanti plc |
Century Aluminum and AngloGold Ashanti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Aluminum and AngloGold Ashanti
The main advantage of trading using opposite Century Aluminum and AngloGold Ashanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Aluminum position performs unexpectedly, AngloGold Ashanti 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 AngloGold Ashanti will offset losses from the drop in AngloGold Ashanti's long position.| Century Aluminum vs. Direxion Daily FTSE | Century Aluminum vs. Dodge Global Stock | Century Aluminum vs. Collegium Pharmaceutical | Century Aluminum vs. Dreyfus Natural Resources |
| AngloGold Ashanti vs. Harmony Gold Mining | AngloGold Ashanti vs. Eldorado Gold Corp | AngloGold Ashanti vs. Kinross Gold | AngloGold Ashanti vs. Pan American Silver |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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