Correlation Analysis Between Alcoa and Century Aluminum

This module allows you to analyze existing cross correlation between Alcoa Corporation and Century Aluminum Company. You can compare the effects of market volatilities on Alcoa 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 Alcoa with a short position of Century Aluminum. See also your portfolio center. Please also check ongoing floating volatility patterns of Alcoa and Century Aluminum.
Horizon     30 Days    Login   to change
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Comparative Performance

Alcoa  
22

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Alcoa Corporation are ranked lower than 2 (%) of all global equities and portfolios over the last 30 days. Despite somewhat strong basic indicators, Alcoa is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short term losses for the investors.
Century Aluminum  
66

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Century Aluminum Company are ranked lower than 6 (%) of all global equities and portfolios over the last 30 days. Inspite fairly weak basic indicators, Century Aluminum showed solid returns over the last few months and may actually be approaching a breakup point.

Alcoa and Century Aluminum Volatility Contrast

 Predicted Return Density 
      Returns 

Alcoa Corp.  vs.  Century Aluminum Company

 Performance (%) 
      Timeline 

Pair Volatility

Allowing for the 30-days total investment horizon, Alcoa is expected to generate 3.89 times less return on investment than Century Aluminum. But when comparing it to its historical volatility, Alcoa Corporation is 1.39 times less risky than Century Aluminum. It trades about 0.04 of its potential returns per unit of risk. Century Aluminum Company is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  568.00  in Century Aluminum Company on November 5, 2019 and sell it today you would earn a total of  126.00  from holding Century Aluminum Company or generate 22.18% return on investment over 30 days.

Pair Corralation between Alcoa and Century Aluminum

0.48
Time Period3 Months [change]
DirectionPositive 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Alcoa and Century Aluminum

Alcoa Corp. diversification synergy

Very weak diversification

Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp. and Century Aluminum Company in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Century Aluminum and Alcoa 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 Alcoa Corporation 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 Alcoa i.e. Alcoa and Century Aluminum go up and down completely randomly.
See also your portfolio center. Please also try Price Transformation module to use price transformation models to analyze depth of different equity instruments across global markets.


 
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