Correlation Between 26442UAG9 and Kaiser Aluminum

Can any of the company-specific risk be diversified away by investing in both 26442UAG9 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 26442UAG9 and Kaiser Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DUKE ENERGY PROGRESS and Kaiser Aluminum, you can compare the effects of market volatilities on 26442UAG9 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 26442UAG9 with a short position of Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of 26442UAG9 and Kaiser Aluminum.

Diversification Opportunities for 26442UAG9 and Kaiser Aluminum

-0.03

Correlation Coefficient

26442UAG9  Kaiser Aluminum

Good diversification

The 3 months correlation between 26442UAG9 and Kaiser is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding DUKE ENERGY PROGRESS and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum and 26442UAG9 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 DUKE ENERGY PROGRESS 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 26442UAG9 i.e., 26442UAG9 and Kaiser Aluminum go up and down completely randomly.

Pair Corralation between 26442UAG9 and Kaiser Aluminum

Assuming the 90 days trading horizon DUKE ENERGY PROGRESS is expected to under-perform the Kaiser Aluminum. But the bond apears to be less risky and, when comparing its historical volatility, DUKE ENERGY PROGRESS is 7.4 times less risky than Kaiser Aluminum. The bond trades about -0.07 of its potential returns per unit of risk. The Kaiser Aluminum is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  7,138  in Kaiser Aluminum on October 10, 2024 and sell it today you would lose (138.00) from holding Kaiser Aluminum or give up 1.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

DUKE ENERGY PROGRESS  vs.  Kaiser Aluminum

DUKE ENERGY PROGRESS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUKE ENERGY PROGRESS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26442UAG9 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with 26442UAG9 and Kaiser Aluminum

The main advantage of trading using opposite 26442UAG9 and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 26442UAG9 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 DUKE ENERGY PROGRESS 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.