Correlation Between Kaiser Aluminum and Anterix

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Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Anterix 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 Kaiser Aluminum and Anterix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Anterix, you can compare the effects of market volatilities on Kaiser Aluminum and Anterix 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 Kaiser Aluminum with a short position of Anterix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Anterix.

Diversification Opportunities for Kaiser Aluminum and Anterix

-0.16
  Correlation Coefficient

Good diversification

The 3 months correlation between Kaiser and Anterix is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Anterix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anterix and Kaiser Aluminum 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 Kaiser Aluminum are associated (or correlated) with Anterix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anterix has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Anterix go up and down completely randomly.

Pair Corralation between Kaiser Aluminum and Anterix

Given the investment horizon of 90 days Kaiser Aluminum is expected to generate 1.1 times more return on investment than Anterix. However, Kaiser Aluminum is 1.1 times more volatile than Anterix. It trades about 0.0 of its potential returns per unit of risk. Anterix is currently generating about -0.11 per unit of risk. If you would invest  7,103  in Kaiser Aluminum on September 24, 2024 and sell it today you would lose (125.00) from holding Kaiser Aluminum or give up 1.76% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Kaiser Aluminum  vs.  Anterix

 Performance 
       Timeline  
Kaiser Aluminum 

Risk-Adjusted Performance

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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 recent stock price uproar, may contribute to short-horizon losses for the private investors.
Anterix 

Risk-Adjusted Performance

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Weak
 
Strong
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 conflicting performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Kaiser Aluminum and Anterix Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kaiser Aluminum and Anterix

The main advantage of trading using opposite Kaiser Aluminum and Anterix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Anterix 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 Anterix will offset losses from the drop in Anterix's long position.
The idea behind Kaiser Aluminum and Anterix 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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