Correlation Between Eshallgo and Century Aluminum
Can any of the company-specific risk be diversified away by investing in both Eshallgo and Century Aluminum 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 Eshallgo and Century Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eshallgo Class A and Century Aluminum, you can compare the effects of market volatilities on Eshallgo and Century Aluminum 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 Eshallgo with a short position of Century Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eshallgo and Century Aluminum.
Diversification Opportunities for Eshallgo and Century Aluminum
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eshallgo and Century is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Eshallgo Class A and Century Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Aluminum and Eshallgo 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 Eshallgo Class A are associated (or correlated) with Century Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Aluminum has no effect on the direction of Eshallgo i.e., Eshallgo and Century Aluminum go up and down completely randomly.
Pair Corralation between Eshallgo and Century Aluminum
Given the investment horizon of 90 days Eshallgo Class A is expected to generate 24.77 times more return on investment than Century Aluminum. However, Eshallgo is 24.77 times more volatile than Century Aluminum. It trades about 0.1 of its potential returns per unit of risk. Century Aluminum is currently generating about 0.07 per unit of risk. If you would invest 0.00 in Eshallgo Class A on August 24, 2024 and sell it today you would earn a total of 375.00 from holding Eshallgo Class A or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 20.77% |
| Values | Daily Returns |
Eshallgo Class A vs. Century Aluminum
Performance |
| Timeline |
| Eshallgo Class A |
| Century Aluminum |
Eshallgo and Century Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eshallgo and Century Aluminum
The main advantage of trading using opposite Eshallgo and Century Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eshallgo position performs unexpectedly, Century Aluminum 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 Century Aluminum will offset losses from the drop in Century Aluminum's long position.| Eshallgo vs. Shake Shack | Eshallgo vs. Lululemon Athletica | Eshallgo vs. Playtika Holding Corp | Eshallgo vs. Haverty Furniture Companies |
| Century Aluminum vs. Eshallgo Class A | Century Aluminum vs. Amtech Systems | Century Aluminum vs. Gold Fields Ltd | Century Aluminum vs. Aegean Airlines SA |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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