Correlation Between Century Aluminum and Turning Point
Can any of the company-specific risk be diversified away by investing in both Century Aluminum and Turning Point 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 Turning Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Aluminum and Turning Point Brands, you can compare the effects of market volatilities on Century Aluminum and Turning Point 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 Turning Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Aluminum and Turning Point.
Diversification Opportunities for Century Aluminum and Turning Point
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Century and Turning is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Century Aluminum and Turning Point Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turning Point Brands 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 Turning Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turning Point Brands has no effect on the direction of Century Aluminum i.e., Century Aluminum and Turning Point go up and down completely randomly.
Pair Corralation between Century Aluminum and Turning Point
Given the investment horizon of 90 days Century Aluminum is expected to generate 2.04 times more return on investment than Turning Point. However, Century Aluminum is 2.04 times more volatile than Turning Point Brands. It trades about 0.08 of its potential returns per unit of risk. Turning Point Brands is currently generating about 0.16 per unit of risk. If you would invest 744.00 in Century Aluminum on December 2, 2024 and sell it today you would earn a total of 1,151 from holding Century Aluminum or generate 154.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Aluminum vs. Turning Point Brands
Performance |
| Timeline |
| Century Aluminum |
| Turning Point Brands |
Century Aluminum and Turning Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Aluminum and Turning Point
The main advantage of trading using opposite Century Aluminum and Turning Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Aluminum position performs unexpectedly, Turning Point 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 Turning Point will offset losses from the drop in Turning Point'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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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