Correlation Between MusclePharm and Aluminum

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

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

Diversification Opportunities for MusclePharm and Aluminum

0.0

Correlation Coefficient

MusclePharm  Aluminum

Pay attention - limited upside

The 3 months correlation between MusclePharm and Aluminum is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MusclePharm and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminum and MusclePharm 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 MusclePharm are associated (or correlated) with Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminum has no effect on the direction of MusclePharm i.e., MusclePharm and Aluminum go up and down completely randomly.

Pair Corralation between MusclePharm and Aluminum

If you would invest (100.00) in MusclePharm on October 11, 2024 and sell it today you would earn a total of  100.00  from holding MusclePharm or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

MusclePharm  vs.  Aluminum of

MusclePharm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MusclePharm has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, MusclePharm is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Aluminum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aluminum of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with MusclePharm and Aluminum

The main advantage of trading using opposite MusclePharm and Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MusclePharm position performs unexpectedly, 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 Aluminum will offset losses from the drop in Aluminum's long position.

The idea behind MusclePharm and Aluminum of 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.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.