Correlation Between Kaiser Aluminum and I 80

Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and I 80 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 I 80 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kaiser Aluminum and I 80 Gold Corp, you can compare the effects of market volatilities on Kaiser Aluminum and I 80 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 I 80. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and I 80.

Diversification Opportunities for Kaiser Aluminum and I 80

0.03

Correlation Coefficient

Kaiser Aluminum  I 80

Significant diversification

The 3 months correlation between Kaiser and IAUX is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and I 80 Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I 80 Gold 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 I 80. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I 80 Gold has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and I 80 go up and down completely randomly.

Pair Corralation between Kaiser Aluminum and I 80

Given the investment horizon of 90 days Kaiser Aluminum is expected to under-perform the I 80. But the stock apears to be less risky and, when comparing its historical volatility, Kaiser Aluminum is 2.71 times less risky than I 80. The stock trades about -0.04 of its potential returns per unit of risk. The I 80 Gold Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  48.00  in I 80 Gold Corp on December 28, 2024 and sell it today you would earn a total of  15.00  from holding I 80 Gold Corp or generate 31.25% return on investment over 90 days.

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

Kaiser Aluminum  vs.  I 80 Gold Corp

Kaiser Aluminum

Risk-Adjusted Performance

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.

I 80 Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in I 80 Gold Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, I 80 showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kaiser Aluminum and I 80

The main advantage of trading using opposite Kaiser Aluminum and I 80 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, I 80 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 I 80 will offset losses from the drop in I 80's long position.

The idea behind Kaiser Aluminum and I 80 Gold Corp 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.