Correlation Between Century Aluminum and Cleantech Power
Can any of the company-specific risk be diversified away by investing in both Century Aluminum and Cleantech Power 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 Cleantech Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Aluminum and Cleantech Power Corp, you can compare the effects of market volatilities on Century Aluminum and Cleantech Power 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 Cleantech Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Aluminum and Cleantech Power.
Diversification Opportunities for Century Aluminum and Cleantech Power
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Century and Cleantech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Century Aluminum and Cleantech Power Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cleantech Power Corp 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 Cleantech Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cleantech Power Corp has no effect on the direction of Century Aluminum i.e., Century Aluminum and Cleantech Power go up and down completely randomly.
Pair Corralation between Century Aluminum and Cleantech Power
If you would invest 1,651 in Century Aluminum on September 19, 2024 and sell it today you would earn a total of 208.00 from holding Century Aluminum or generate 12.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Century Aluminum vs. Cleantech Power Corp
Performance |
| Timeline |
| Century Aluminum |
| Cleantech Power Corp |
Century Aluminum and Cleantech Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Aluminum and Cleantech Power
The main advantage of trading using opposite Century Aluminum and Cleantech Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Aluminum position performs unexpectedly, Cleantech Power 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 Cleantech Power will offset losses from the drop in Cleantech Power's long position.The idea behind Century Aluminum and Cleantech Power Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cleantech Power vs. First Ship Lease | Cleantech Power vs. Global Ship Lease | Cleantech Power vs. NetEase | Cleantech Power vs. NH Foods Ltd |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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