Correlation Between GameStop Corp and Century Aluminum
Can any of the company-specific risk be diversified away by investing in both GameStop Corp 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 GameStop Corp and Century Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GameStop Corp and Century Aluminum, you can compare the effects of market volatilities on GameStop Corp 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 GameStop Corp with a short position of Century Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameStop Corp and Century Aluminum.
Diversification Opportunities for GameStop Corp and Century Aluminum
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between GameStop and Century is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and Century Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Aluminum and GameStop Corp 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 GameStop Corp 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 GameStop Corp i.e., GameStop Corp and Century Aluminum go up and down completely randomly.
Pair Corralation between GameStop Corp and Century Aluminum
Assuming the 90 days trading horizon GameStop Corp is expected to generate 2.6 times more return on investment than Century Aluminum. However, GameStop Corp is 2.6 times more volatile than Century Aluminum. It trades about 0.09 of its potential returns per unit of risk. Century Aluminum is currently generating about 0.03 per unit of risk. If you would invest 1,046 in GameStop Corp on November 7, 2024 and sell it today you would earn a total of 1,551 from holding GameStop Corp or generate 148.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GameStop Corp vs. Century Aluminum
Performance |
| Timeline |
| GameStop Corp |
| Century Aluminum |
GameStop Corp and Century Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GameStop Corp and Century Aluminum
The main advantage of trading using opposite GameStop Corp and Century Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameStop Corp 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.| GameStop Corp vs. SANOK RUBBER ZY | GameStop Corp vs. GEELY AUTOMOBILE | GameStop Corp vs. Summit Materials | GameStop Corp vs. INTER CARS SA |
| Century Aluminum vs. Summit Hotel Properties | Century Aluminum vs. Acadia Healthcare | Century Aluminum vs. RCI Hospitality Holdings | Century Aluminum vs. US Physical Therapy |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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