Correlation Between GRENKELEASING Dusseldorf and Century Aluminum

Can any of the company-specific risk be diversified away by investing in both GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf and Century Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GRENKELEASING Dusseldorf and Century Aluminum, you can compare the effects of market volatilities on GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf with a short position of Century Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRENKELEASING Dusseldorf and Century Aluminum.

Diversification Opportunities for GRENKELEASING Dusseldorf and Century Aluminum

-0.08

Correlation Coefficient

GRENKELEASING Dusseldorf  Century Aluminum

Good diversification

The 3 months correlation between GRENKELEASING and Century is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding GRENKELEASING Dusseldorf and Century Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Aluminum and GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf i.e., GRENKELEASING Dusseldorf and Century Aluminum go up and down completely randomly.

Pair Corralation between GRENKELEASING Dusseldorf and Century Aluminum

Assuming the 90 days trading horizon GRENKELEASING Dusseldorf is expected to under-perform the Century Aluminum. But the stock apears to be less risky and, when comparing its historical volatility, GRENKELEASING Dusseldorf is 1.58 times less risky than Century Aluminum. The stock trades about -0.04 of its potential returns per unit of risk. The Century Aluminum is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,768  in Century Aluminum on December 24, 2024 and sell it today you would earn a total of  66.00  from holding Century Aluminum or generate 3.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

GRENKELEASING Dusseldorf  vs.  Century Aluminum

GRENKELEASING Dusseldorf

Risk-Adjusted Performance

Very Weak

Over the last 90 days GRENKELEASING Dusseldorf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's forward-looking indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Century Aluminum

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Century Aluminum are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Century Aluminum may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with GRENKELEASING Dusseldorf and Century Aluminum

The main advantage of trading using opposite GRENKELEASING Dusseldorf and Century Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRENKELEASING Dusseldorf 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.

The idea behind GRENKELEASING Dusseldorf and Century Aluminum pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.