Correlation Between Corporate Travel and Kaiser Aluminum

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Can any of the company-specific risk be diversified away by investing in both Corporate Travel 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 Corporate Travel and Kaiser Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Travel Management and Kaiser Aluminum, you can compare the effects of market volatilities on Corporate Travel 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 Corporate Travel with a short position of Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Travel and Kaiser Aluminum.

Diversification Opportunities for Corporate Travel and Kaiser Aluminum

CorporateKaiserDiversified AwayCorporateKaiserDiversified Away100%
0.03
  Correlation Coefficient

Significant diversification

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

Pair Corralation between Corporate Travel and Kaiser Aluminum

Assuming the 90 days trading horizon Corporate Travel Management is expected to under-perform the Kaiser Aluminum. But the stock apears to be less risky and, when comparing its historical volatility, Corporate Travel Management is 1.07 times less risky than Kaiser Aluminum. The stock trades about 0.0 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  6,803  in Kaiser Aluminum on November 20, 2024 and sell it today you would lose (153.00) from holding Kaiser Aluminum or give up 2.25% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Corporate Travel Management  vs.  Kaiser Aluminum

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -1001020
JavaScript chart by amCharts 3.21.151C6 KLU1
       Timeline  
Corporate Travel Man 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Corporate Travel Management are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Corporate Travel is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb7.588.59
Kaiser Aluminum 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Kaiser Aluminum has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb66687072747678

Corporate Travel and Kaiser Aluminum Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.31-4.72-3.14-1.56-0.02641.633.335.026.718.4 0.020.040.060.080.10
JavaScript chart by amCharts 3.21.151C6 KLU1
       Returns  

Pair Trading with Corporate Travel and Kaiser Aluminum

The main advantage of trading using opposite Corporate Travel and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Travel 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 Corporate Travel Management 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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