Correlation Between SPARTAN STORES and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES 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 SPARTAN STORES and Kaiser Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and Kaiser Aluminum, you can compare the effects of market volatilities on SPARTAN STORES 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 SPARTAN STORES with a short position of Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and Kaiser Aluminum.
Diversification Opportunities for SPARTAN STORES and Kaiser Aluminum
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPARTAN and Kaiser is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum and SPARTAN STORES 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 SPARTAN STORES 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 SPARTAN STORES i.e., SPARTAN STORES and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between SPARTAN STORES and Kaiser Aluminum
Assuming the 90 days trading horizon SPARTAN STORES is expected to under-perform the Kaiser Aluminum. But the stock apears to be less risky and, when comparing its historical volatility, SPARTAN STORES is 1.37 times less risky than Kaiser Aluminum. The stock trades about -0.03 of its potential returns per unit of risk. The Kaiser Aluminum is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 7,499 in Kaiser Aluminum on October 9, 2024 and sell it today you would lose (699.00) from holding Kaiser Aluminum or give up 9.32% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SPARTAN STORES vs. Kaiser Aluminum
Performance |
Timeline |
SPARTAN STORES |
Kaiser Aluminum |
SPARTAN STORES and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPARTAN STORES and Kaiser Aluminum
The main advantage of trading using opposite SPARTAN STORES and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES 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.SPARTAN STORES vs. Aedas Homes SA | SPARTAN STORES vs. Corporate Office Properties | SPARTAN STORES vs. Focus Home Interactive | SPARTAN STORES vs. alstria office REIT AG |
Kaiser Aluminum vs. SCIENCE IN SPORT | Kaiser Aluminum vs. MICRONIC MYDATA | Kaiser Aluminum vs. ANTA SPORTS PRODUCT | Kaiser Aluminum vs. Zoom Video Communications |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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