Correlation Between Kaiser Aluminum and Femasys

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

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

Diversification Opportunities for Kaiser Aluminum and Femasys

-0.24

Correlation Coefficient

Kaiser Aluminum  Femasys

Very good diversification

The 3 months correlation between Kaiser and Femasys is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Femasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Femasys 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 Femasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Femasys has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Femasys go up and down completely randomly.

Pair Corralation between Kaiser Aluminum and Femasys

Given the investment horizon of 90 days Kaiser Aluminum is expected to generate 101.53 times less return on investment than Femasys. But when comparing it to its historical volatility, Kaiser Aluminum is 7.07 times less risky than Femasys. It trades about 0.0 of its potential returns per unit of risk. Femasys is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  118.00  in Femasys on October 27, 2024 and sell it today you would lose (3.00) from holding Femasys or give up 2.54% 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.  Femasys

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.

Femasys

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Kaiser Aluminum and Femasys

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

The idea behind Kaiser Aluminum and Femasys 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.