Correlation Between Century Aluminum and Figs
Can any of the company-specific risk be diversified away by investing in both Century Aluminum and Figs 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 Figs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Aluminum and Figs Inc, you can compare the effects of market volatilities on Century Aluminum and Figs 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 Figs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Aluminum and Figs.
Diversification Opportunities for Century Aluminum and Figs
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Century and Figs is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Century Aluminum and Figs Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figs Inc 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 Figs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figs Inc has no effect on the direction of Century Aluminum i.e., Century Aluminum and Figs go up and down completely randomly.
Pair Corralation between Century Aluminum and Figs
Given the investment horizon of 90 days Century Aluminum is expected to generate 0.96 times more return on investment than Figs. However, Century Aluminum is 1.04 times less risky than Figs. It trades about 0.07 of its potential returns per unit of risk. Figs Inc is currently generating about 0.02 per unit of risk. If you would invest 1,771 in Century Aluminum on August 30, 2024 and sell it today you would earn a total of 533.00 from holding Century Aluminum or generate 30.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Aluminum vs. Figs Inc
Performance |
| Timeline |
| Century Aluminum |
| Figs Inc |
Century Aluminum and Figs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Aluminum and Figs
The main advantage of trading using opposite Century Aluminum and Figs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Aluminum position performs unexpectedly, Figs 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 Figs will offset losses from the drop in Figs' long position.| Century Aluminum vs. Kaiser Aluminum | Century Aluminum vs. Commercial Metals | Century Aluminum vs. Steel Dynamics | Century Aluminum vs. Reliance Steel Aluminum |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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