Correlation Between ANZNZ and Kaiser Aluminum

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

By analyzing existing cross correlation between ANZNZ 5548 11 AUG 32 and Kaiser Aluminum, you can compare the effects of market volatilities on ANZNZ 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 ANZNZ with a short position of Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANZNZ and Kaiser Aluminum.

Diversification Opportunities for ANZNZ and Kaiser Aluminum

0.04

Correlation Coefficient

ANZNZ  Kaiser Aluminum

Significant diversification

The 3 months correlation between ANZNZ and Kaiser is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding ANZNZ 5548 11 AUG 32 and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum and ANZNZ 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 ANZNZ 5548 11 AUG 32 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 ANZNZ i.e., ANZNZ and Kaiser Aluminum go up and down completely randomly.

Pair Corralation between ANZNZ and Kaiser Aluminum

Assuming the 90 days trading horizon ANZNZ 5548 11 AUG 32 is expected to under-perform the Kaiser Aluminum. But the bond apears to be less risky and, when comparing its historical volatility, ANZNZ 5548 11 AUG 32 is 2.51 times less risky than Kaiser Aluminum. The bond trades about -0.01 of its potential returns per unit of risk. The Kaiser Aluminum is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  6,678  in Kaiser Aluminum on October 23, 2024 and sell it today you would earn a total of  690.00  from holding Kaiser Aluminum or generate 10.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	21.67%
Values	Daily Returns

ANZNZ 5548 11 AUG 32  vs.  Kaiser Aluminum

ANZNZ 5548 11

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANZNZ 5548 11 AUG 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ANZNZ is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kaiser Aluminum

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kaiser Aluminum are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Kaiser Aluminum may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ANZNZ and Kaiser Aluminum

The main advantage of trading using opposite ANZNZ and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANZNZ 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.

The idea behind ANZNZ 5548 11 AUG 32 and Kaiser Aluminum 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.