Correlation Between Kaiser Aluminum and Anterix
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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kaiser Aluminum vs. Anterix
Performance |
Timeline |
Kaiser Aluminum |
Anterix |
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.Kaiser Aluminum vs. Wheaton Precious Metals | Kaiser Aluminum vs. Royal Gold | Kaiser Aluminum vs. Sandstorm Gold Ltd | Kaiser Aluminum vs. Gold Fields Ltd |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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