Correlation Between 694308KH9 and Aluminum

Can any of the company-specific risk be diversified away by investing in both 694308KH9 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 694308KH9 and Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PCG 675 15 JAN 53 and Aluminum of, you can compare the effects of market volatilities on 694308KH9 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 694308KH9 with a short position of Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of 694308KH9 and Aluminum.

Diversification Opportunities for 694308KH9 and Aluminum

0.11

Correlation Coefficient

694308KH9  Aluminum

Average diversification

The 3 months correlation between 694308KH9 and Aluminum is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding PCG 675 15 JAN 53 and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminum and 694308KH9 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 PCG 675 15 JAN 53 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 694308KH9 i.e., 694308KH9 and Aluminum go up and down completely randomly.

Pair Corralation between 694308KH9 and Aluminum

Assuming the 90 days trading horizon PCG 675 15 JAN 53 is expected to generate 0.19 times more return on investment than Aluminum. However, PCG 675 15 JAN 53 is 5.38 times less risky than Aluminum. It trades about -0.11 of its potential returns per unit of risk. Aluminum of is currently generating about -0.05 per unit of risk. If you would invest  11,216  in PCG 675 15 JAN 53 on October 9, 2024 and sell it today you would lose (637.00) from holding PCG 675 15 JAN 53 or give up 5.68% of portfolio value over 90 days.

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

PCG 675 15 JAN 53  vs.  Aluminum of

PCG 675 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PCG 675 15 JAN 53 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 694308KH9 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 694308KH9 and Aluminum

The main advantage of trading using opposite 694308KH9 and Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 694308KH9 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 PCG 675 15 JAN 53 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.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.