Correlation Between Ep Emerging and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both Ep Emerging 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 Ep Emerging and Kaiser Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ep Emerging Markets and Kaiser Aluminum, you can compare the effects of market volatilities on Ep Emerging 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 Ep Emerging with a short position of Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ep Emerging and Kaiser Aluminum.
Diversification Opportunities for Ep Emerging and Kaiser Aluminum
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EPASX and Kaiser is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ep Emerging Markets and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum and Ep Emerging 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 Ep Emerging Markets 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 Ep Emerging i.e., Ep Emerging and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between Ep Emerging and Kaiser Aluminum
Assuming the 90 days horizon Ep Emerging Markets is expected to generate 0.54 times more return on investment than Kaiser Aluminum. However, Ep Emerging Markets is 1.84 times less risky than Kaiser Aluminum. It trades about -0.07 of its potential returns per unit of risk. Kaiser Aluminum is currently generating about -0.25 per unit of risk. If you would invest 1,004 in Ep Emerging Markets on September 13, 2024 and sell it today you would lose (12.00) from holding Ep Emerging Markets or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ep Emerging Markets vs. Kaiser Aluminum
Performance |
| Timeline |
| Ep Emerging Markets |
| Kaiser Aluminum |
Ep Emerging and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ep Emerging and Kaiser Aluminum
The main advantage of trading using opposite Ep Emerging and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ep Emerging 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.| Ep Emerging vs. Europac International Bond | Ep Emerging vs. Europac International Dividend | Ep Emerging vs. Ep Emerging Markets | Ep Emerging vs. Investment Managers Series |
| Kaiser Aluminum vs. Fortitude Gold Corp | Kaiser Aluminum vs. New Gold | Kaiser Aluminum vs. Galiano Gold | Kaiser Aluminum vs. GoldMining |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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