Correlation Between Century Aluminum and Cool
Can any of the company-specific risk be diversified away by investing in both Century Aluminum and Cool 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 Cool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Aluminum and Cool Company, you can compare the effects of market volatilities on Century Aluminum and Cool 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 Cool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Aluminum and Cool.
Diversification Opportunities for Century Aluminum and Cool
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Century and Cool is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Century Aluminum and Cool Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cool Company 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 Cool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cool Company has no effect on the direction of Century Aluminum i.e., Century Aluminum and Cool go up and down completely randomly.
Pair Corralation between Century Aluminum and Cool
Given the investment horizon of 90 days Century Aluminum is expected to generate 1.73 times more return on investment than Cool. However, Century Aluminum is 1.73 times more volatile than Cool Company. It trades about 0.11 of its potential returns per unit of risk. Cool Company is currently generating about -0.06 per unit of risk. If you would invest 807.00 in Century Aluminum on September 14, 2024 and sell it today you would earn a total of 1,280 from holding Century Aluminum or generate 158.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Aluminum vs. Cool Company
Performance |
| Timeline |
| Century Aluminum |
| Cool Company |
Century Aluminum and Cool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Aluminum and Cool
The main advantage of trading using opposite Century Aluminum and Cool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Aluminum position performs unexpectedly, Cool 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 Cool will offset losses from the drop in Cool's long position.| Century Aluminum vs. Kaiser Aluminum | Century Aluminum vs. Commercial Metals | Century Aluminum vs. Steel Dynamics | Century Aluminum vs. Reliance Steel Aluminum |
| Cool vs. Century Aluminum | Cool vs. Cedar Realty Trust | Cool vs. Coupang LLC | Cool vs. SunLink Health Systems |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |