Correlation Between Century Aluminum and WPLAU
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By analyzing existing cross correlation between Century Aluminum and WPLAU 37 15 SEP 26, you can compare the effects of market volatilities on Century Aluminum and WPLAU 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 Century Aluminum with a short position of WPLAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Aluminum and WPLAU.
Diversification Opportunities for Century Aluminum and WPLAU
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Century and WPLAU is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Century Aluminum and WPLAU 37 15 SEP 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WPLAU 37 15 and Century Aluminum 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 Century Aluminum are associated (or correlated) with WPLAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WPLAU 37 15 has no effect on the direction of Century Aluminum i.e., Century Aluminum and WPLAU go up and down completely randomly.
Pair Corralation between Century Aluminum and WPLAU
Given the investment horizon of 90 days Century Aluminum is expected to generate 7.24 times more return on investment than WPLAU. However, Century Aluminum is 7.24 times more volatile than WPLAU 37 15 SEP 26. It trades about 0.1 of its potential returns per unit of risk. WPLAU 37 15 SEP 26 is currently generating about -0.18 per unit of risk. If you would invest 1,538 in Century Aluminum on September 24, 2024 and sell it today you would earn a total of 349.00 from holding Century Aluminum or generate 22.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 49.23% |
Values | Daily Returns |
Century Aluminum vs. WPLAU 37 15 SEP 26
Performance |
Timeline |
Century Aluminum |
WPLAU 37 15 |
Century Aluminum and WPLAU Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Century Aluminum and WPLAU
The main advantage of trading using opposite Century Aluminum and WPLAU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Aluminum position performs unexpectedly, WPLAU 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 WPLAU will offset losses from the drop in WPLAU's long position.Century Aluminum vs. Wheaton Precious Metals | ||
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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