Correlation Between Anterix and Kaiser Aluminum

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

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

Diversification Opportunities for Anterix and Kaiser Aluminum

0.59

Correlation Coefficient

Anterix  Kaiser Aluminum

Very weak diversification

The 3 months correlation between Anterix and Kaiser is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Anterix and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum and Anterix 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 Anterix are associated (or correlated) with Kaiser Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaiser Aluminum has no effect on the direction of Anterix i.e., Anterix and Kaiser Aluminum go up and down completely randomly.

Pair Corralation between Anterix and Kaiser Aluminum

Given the investment horizon of 90 days Anterix is expected to under-perform the Kaiser Aluminum. But the stock apears to be less risky and, when comparing its historical volatility, Anterix is 1.04 times less risky than Kaiser Aluminum. The stock trades about -0.01 of its potential returns per unit of risk. The Kaiser Aluminum is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  7,894  in Kaiser Aluminum on October 12, 2024 and sell it today you would lose (873.00) from holding Kaiser Aluminum or give up 11.06% of portfolio value over 90 days.

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

Anterix  vs.  Kaiser Aluminum

Anterix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anterix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Kaiser Aluminum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kaiser Aluminum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Kaiser Aluminum is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Anterix and Kaiser Aluminum

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

The idea behind Anterix and Kaiser Aluminum 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.