Correlation Between Commercial Vehicle and Aluminum
Can any of the company-specific risk be diversified away by investing in both Commercial Vehicle and 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 Commercial Vehicle and Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial Vehicle Group and Aluminum of, you can compare the effects of market volatilities on Commercial Vehicle and 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 Commercial Vehicle with a short position of Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Vehicle and Aluminum.
Diversification Opportunities for Commercial Vehicle and Aluminum
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Commercial and Aluminum is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminum and Commercial Vehicle 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 Commercial Vehicle Group are associated (or correlated) with Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminum has no effect on the direction of Commercial Vehicle i.e., Commercial Vehicle and Aluminum go up and down completely randomly.
Pair Corralation between Commercial Vehicle and Aluminum
Assuming the 90 days trading horizon Commercial Vehicle Group is expected to under-perform the Aluminum. But the stock apears to be less risky and, when comparing its historical volatility, Commercial Vehicle Group is 1.28 times less risky than Aluminum. The stock trades about -0.01 of its potential returns per unit of risk. The Aluminum of is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 56.00 in Aluminum of on October 30, 2024 and sell it today you would earn a total of 6.00 from holding Aluminum of or generate 10.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commercial Vehicle Group vs. Aluminum of
Performance |
| Timeline |
| Commercial Vehicle |
| Aluminum |
Commercial Vehicle and Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial Vehicle and Aluminum
The main advantage of trading using opposite Commercial Vehicle and Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Vehicle position performs unexpectedly, 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 Aluminum will offset losses from the drop in Aluminum's long position.| Commercial Vehicle vs. PLAYMATES TOYS | Commercial Vehicle vs. PLAY2CHILL SA ZY | Commercial Vehicle vs. Cairo Communication SpA | Commercial Vehicle vs. Aristocrat Leisure Limited |
| Aluminum vs. Infrastrutture Wireless Italiane | Aluminum vs. Entravision Communications | Aluminum vs. AECOM TECHNOLOGY | Aluminum vs. NURAN WIRELESS INC |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |