Correlation Between United States and Noranda Aluminum
Can any of the company-specific risk be diversified away by investing in both United States and Noranda 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 United States and Noranda Aluminum 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 Noranda Aluminum Holding, you can compare the effects of market volatilities on United States and Noranda 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 United States with a short position of Noranda Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Noranda Aluminum.
Diversification Opportunities for United States and Noranda Aluminum
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Noranda is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Noranda Aluminum Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noranda Aluminum Holding 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 Noranda Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noranda Aluminum Holding has no effect on the direction of United States i.e., United States and Noranda Aluminum go up and down completely randomly.
Pair Corralation between United States and Noranda Aluminum
If you would invest 3,858 in United States Steel on September 2, 2024 and sell it today you would earn a total of 219.00 from holding United States Steel or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
United States Steel vs. Noranda Aluminum Holding
Performance |
| Timeline |
| United States Steel |
| Noranda Aluminum Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
United States and Noranda Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Noranda Aluminum
The main advantage of trading using opposite United States and Noranda Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, Noranda 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 Noranda Aluminum will offset losses from the drop in Noranda Aluminum's long position.| United States vs. Fortitude Gold Corp | United States vs. New Gold | United States vs. Galiano Gold | United States vs. GoldMining |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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