Correlation Between Global Ship and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both Global Ship 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 Global Ship and Kaiser Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and Kaiser Aluminum, you can compare the effects of market volatilities on Global Ship 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 Global Ship with a short position of Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Kaiser Aluminum.
Diversification Opportunities for Global Ship and Kaiser Aluminum
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Global and Kaiser is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum and Global Ship 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 Global Ship Lease 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 Global Ship i.e., Global Ship and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between Global Ship and Kaiser Aluminum
Assuming the 90 days horizon Global Ship Lease is expected to under-perform the Kaiser Aluminum. But the stock apears to be less risky and, when comparing its historical volatility, Global Ship Lease is 2.06 times less risky than Kaiser Aluminum. The stock trades about -0.04 of its potential returns per unit of risk. The Kaiser Aluminum is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 6,300 in Kaiser Aluminum on August 28, 2024 and sell it today you would earn a total of 1,200 from holding Kaiser Aluminum or generate 19.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. Kaiser Aluminum
Performance |
| Timeline |
| Global Ship Lease |
| Kaiser Aluminum |
Global Ship and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and Kaiser Aluminum
The main advantage of trading using opposite Global Ship and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship 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.| Global Ship vs. COSTCO WHOLESALE CDR | Global Ship vs. WisdomTree Investments | Global Ship vs. Apollo Investment Corp | Global Ship vs. Retail Estates NV |
| Kaiser Aluminum vs. Zoom Video Communications | Kaiser Aluminum vs. Internet Thailand PCL | Kaiser Aluminum vs. JAPAN AIRLINES | Kaiser Aluminum vs. Singapore Telecommunications Limited |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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