Correlation Between Century Aluminum and LOWES
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By analyzing existing cross correlation between Century Aluminum and LOWES INC 6875, you can compare the effects of market volatilities on Century Aluminum and LOWES 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 LOWES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Aluminum and LOWES.
Diversification Opportunities for Century Aluminum and LOWES
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Century and LOWES is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Century Aluminum and LOWES INC 6875 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOWES INC 6875 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 LOWES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOWES INC 6875 has no effect on the direction of Century Aluminum i.e., Century Aluminum and LOWES go up and down completely randomly.
Pair Corralation between Century Aluminum and LOWES
Given the investment horizon of 90 days Century Aluminum is expected to generate 12.58 times more return on investment than LOWES. However, Century Aluminum is 12.58 times more volatile than LOWES INC 6875. It trades about 0.03 of its potential returns per unit of risk. LOWES INC 6875 is currently generating about 0.06 per unit of risk. If you would invest 1,817 in Century Aluminum on December 4, 2024 and sell it today you would earn a total of 2.00 from holding Century Aluminum or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Century Aluminum vs. LOWES INC 6875
Performance |
| Timeline |
| Century Aluminum |
| LOWES INC 6875 |
Century Aluminum and LOWES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Aluminum and LOWES
The main advantage of trading using opposite Century Aluminum and LOWES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Aluminum position performs unexpectedly, LOWES 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 LOWES will offset losses from the drop in LOWES'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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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