Correlation Between Aluminum Corp and Noranda Aluminum
Can any of the company-specific risk be diversified away by investing in both Aluminum Corp and Noranda 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 Aluminum Corp and Noranda Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum Corp and Noranda Aluminum Holding, you can compare the effects of market volatilities on Aluminum Corp and Noranda 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 Aluminum Corp with a short position of Noranda Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminum Corp and Noranda Aluminum.
Diversification Opportunities for Aluminum Corp and Noranda Aluminum
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aluminum and Noranda is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum Corp and Noranda Aluminum Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noranda Aluminum Holding and Aluminum Corp 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 Aluminum Corp are associated (or correlated) with Noranda Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noranda Aluminum Holding has no effect on the direction of Aluminum Corp i.e., Aluminum Corp and Noranda Aluminum go up and down completely randomly.
Pair Corralation between Aluminum Corp and Noranda Aluminum
If you would invest (100.00) in Aluminum Corp on January 20, 2024 and sell it today you would earn a total of 100.00 from holding Aluminum Corp 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 |
Aluminum Corp vs. Noranda Aluminum Holding
Performance |
| Timeline |
| Aluminum Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Noranda Aluminum Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Aluminum Corp and Noranda Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminum Corp and Noranda Aluminum
The main advantage of trading using opposite Aluminum Corp and Noranda Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminum Corp position performs unexpectedly, Noranda 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 Noranda Aluminum will offset losses from the drop in Noranda Aluminum's long position.| Aluminum Corp vs. Omni Health | Aluminum Corp vs. Ultra Clean Holdings | Aluminum Corp vs. Mills Music Trust | Aluminum Corp vs. Amgen Inc |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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