Correlation Between Quanex Building and Century Aluminum
Can any of the company-specific risk be diversified away by investing in both Quanex Building 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 Quanex Building and Century Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quanex Building Products and Century Aluminum, you can compare the effects of market volatilities on Quanex Building 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 Quanex Building with a short position of Century Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quanex Building and Century Aluminum.
Diversification Opportunities for Quanex Building and Century Aluminum
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Quanex and Century is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Quanex Building Products and Century Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Aluminum and Quanex Building 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 Quanex Building Products 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 Quanex Building i.e., Quanex Building and Century Aluminum go up and down completely randomly.
Pair Corralation between Quanex Building and Century Aluminum
Allowing for the 90-day total investment horizon Quanex Building Products is expected to under-perform the Century Aluminum. But the stock apears to be less risky and, when comparing its historical volatility, Quanex Building Products is 1.45 times less risky than Century Aluminum. The stock trades about 0.0 of its potential returns per unit of risk. The Century Aluminum is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 730.00 in Century Aluminum on May 29, 2025 and sell it today you would earn a total of 1,524 from holding Century Aluminum or generate 208.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quanex Building Products vs. Century Aluminum
Performance |
| Timeline |
| Quanex Building Products |
| Century Aluminum |
Quanex Building and Century Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quanex Building and Century Aluminum
The main advantage of trading using opposite Quanex Building and Century Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quanex Building 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.| Quanex Building vs. Gibraltar Industries | Quanex Building vs. Armstrong World Industries | Quanex Building vs. Apogee Enterprises | Quanex Building vs. Carpenter Technology |
| Century Aluminum vs. Commercial Metals | Century Aluminum vs. Kaiser Aluminum | Century Aluminum vs. Reliance Steel Aluminum | Century Aluminum vs. Steel Dynamics |
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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.
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