Correlation Between Century Aluminum and Zapata Computing

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Can any of the company-specific risk be diversified away by investing in both Century Aluminum and Zapata Computing 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 Zapata Computing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Aluminum and Zapata Computing Holdings, you can compare the effects of market volatilities on Century Aluminum and Zapata Computing 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 Zapata Computing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Aluminum and Zapata Computing.

Diversification Opportunities for Century Aluminum and Zapata Computing

CenturyZapataDiversified AwayCenturyZapataDiversified Away100%
-0.82
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Century and Zapata is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Century Aluminum and Zapata Computing Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zapata Computing Holdings 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 Zapata Computing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zapata Computing Holdings has no effect on the direction of Century Aluminum i.e., Century Aluminum and Zapata Computing go up and down completely randomly.

Pair Corralation between Century Aluminum and Zapata Computing

If you would invest  1.10  in Zapata Computing Holdings on September 19, 2024 and sell it today you would earn a total of  0.00  from holding Zapata Computing Holdings or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy4.55%
ValuesDaily Returns

Century Aluminum  vs.  Zapata Computing Holdings

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -50050
JavaScript chart by amCharts 3.21.15CENX ZPTA
       Timeline  
Century Aluminum 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Century Aluminum are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Century Aluminum showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec161820222426
Zapata Computing Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Zapata Computing Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Century Aluminum and Zapata Computing Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-11.9-8.91-5.92-2.990.03.16.329.5312.7415.95 0.0050.0100.0150.0200.025
JavaScript chart by amCharts 3.21.15CENX ZPTA
       Returns  

Pair Trading with Century Aluminum and Zapata Computing

The main advantage of trading using opposite Century Aluminum and Zapata Computing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Aluminum position performs unexpectedly, Zapata Computing 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 Zapata Computing will offset losses from the drop in Zapata Computing's long position.
The idea behind Century Aluminum and Zapata Computing Holdings 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.
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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