Correlation Between Century Aluminum and Osaka Steel
Can any of the company-specific risk be diversified away by investing in both Century Aluminum and Osaka Steel 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 Osaka Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Aluminum and Osaka Steel Co,, you can compare the effects of market volatilities on Century Aluminum and Osaka Steel 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 Osaka Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Aluminum and Osaka Steel.
Diversification Opportunities for Century Aluminum and Osaka Steel
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Century and Osaka is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Century Aluminum and Osaka Steel Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osaka Steel Co, 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 Osaka Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osaka Steel Co, has no effect on the direction of Century Aluminum i.e., Century Aluminum and Osaka Steel go up and down completely randomly.
Pair Corralation between Century Aluminum and Osaka Steel
Given the investment horizon of 90 days Century Aluminum is expected to generate 61.63 times more return on investment than Osaka Steel. However, Century Aluminum is 61.63 times more volatile than Osaka Steel Co,. It trades about 0.09 of its potential returns per unit of risk. Osaka Steel Co, is currently generating about 0.07 per unit of risk. If you would invest 875.00 in Century Aluminum on September 12, 2024 and sell it today you would earn a total of 1,341 from holding Century Aluminum or generate 153.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Aluminum vs. Osaka Steel Co,
Performance |
| Timeline |
| Century Aluminum |
| Osaka Steel Co, |
Century Aluminum and Osaka Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Aluminum and Osaka Steel
The main advantage of trading using opposite Century Aluminum and Osaka Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Aluminum position performs unexpectedly, Osaka Steel 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 Osaka Steel will offset losses from the drop in Osaka Steel's long position.| Century Aluminum vs. Kaiser Aluminum | Century Aluminum vs. Commercial Metals | Century Aluminum vs. Steel Dynamics | Century Aluminum vs. Reliance Steel Aluminum |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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