Correlation Between International Tower and Constellium
Can any of the company-specific risk be diversified away by investing in both International Tower and Constellium 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 International Tower and Constellium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Tower Hill and Constellium Nv, you can compare the effects of market volatilities on International Tower and Constellium 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 International Tower with a short position of Constellium. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Tower and Constellium.
Diversification Opportunities for International Tower and Constellium
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between International and Constellium is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding International Tower Hill and Constellium Nv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellium Nv and International Tower 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 International Tower Hill are associated (or correlated) with Constellium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellium Nv has no effect on the direction of International Tower i.e., International Tower and Constellium go up and down completely randomly.
Pair Corralation between International Tower and Constellium
Considering the 90-day investment horizon International Tower Hill is expected to generate 1.87 times more return on investment than Constellium. However, International Tower is 1.87 times more volatile than Constellium Nv. It trades about 0.03 of its potential returns per unit of risk. Constellium Nv is currently generating about 0.02 per unit of risk. If you would invest 42.00 in International Tower Hill on September 5, 2024 and sell it today you would earn a total of 4.00 from holding International Tower Hill or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Tower Hill vs. Constellium Nv
Performance |
| Timeline |
| International Tower Hill |
| Constellium Nv |
International Tower and Constellium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Tower and Constellium
The main advantage of trading using opposite International Tower and Constellium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Tower position performs unexpectedly, Constellium 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 Constellium will offset losses from the drop in Constellium's long position.| International Tower vs. Constellium Nv | International Tower vs. Century Aluminum | International Tower vs. China Hongqiao Group | International Tower vs. Kaiser Aluminum |
| Constellium vs. Century Aluminum | Constellium vs. Alcoa Corp | Constellium vs. China Hongqiao Group | Constellium vs. Norsk Hydro ASA |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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