Correlation Between United States and Constellium
Can any of the company-specific risk be diversified away by investing in both United States 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 United States and Constellium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Constellium Nv, you can compare the effects of market volatilities on United States 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 United States with a short position of Constellium. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Constellium.
Diversification Opportunities for United States and Constellium
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Constellium is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Constellium Nv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellium Nv and United States 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 United States Steel 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 United States i.e., United States and Constellium go up and down completely randomly.
Pair Corralation between United States and Constellium
Taking into account the 90-day investment horizon United States is expected to generate 1.4 times less return on investment than Constellium. In addition to that, United States is 1.71 times more volatile than Constellium Nv. It trades about 0.11 of its total potential returns per unit of risk. Constellium Nv is currently generating about 0.27 per unit of volatility. If you would invest 1,119 in Constellium Nv on September 4, 2024 and sell it today you would earn a total of 129.00 from holding Constellium Nv or generate 11.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. Constellium Nv
Performance |
| Timeline |
| United States Steel |
| Constellium Nv |
United States and Constellium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Constellium
The main advantage of trading using opposite United States and Constellium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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.| United States vs. Constellium Nv | United States vs. Century Aluminum | United States vs. China Hongqiao Group | United States 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |