Correlation Between FEMALE HEALTH and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both FEMALE HEALTH 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 FEMALE HEALTH and Kaiser Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FEMALE HEALTH and Kaiser Aluminum, you can compare the effects of market volatilities on FEMALE HEALTH 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 FEMALE HEALTH with a short position of Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and Kaiser Aluminum.
Diversification Opportunities for FEMALE HEALTH and Kaiser Aluminum
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FEMALE and Kaiser is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum and FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH i.e., FEMALE HEALTH and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between FEMALE HEALTH and Kaiser Aluminum
Assuming the 90 days trading horizon FEMALE HEALTH is expected to generate 5.32 times less return on investment than Kaiser Aluminum. In addition to that, FEMALE HEALTH is 1.34 times more volatile than Kaiser Aluminum. It trades about 0.02 of its total potential returns per unit of risk. Kaiser Aluminum is currently generating about 0.14 per unit of volatility. If you would invest 6,850 in Kaiser Aluminum on September 2, 2024 and sell it today you would earn a total of 650.00 from holding Kaiser Aluminum or generate 9.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FEMALE HEALTH vs. Kaiser Aluminum
Performance |
| Timeline |
| FEMALE HEALTH |
| Kaiser Aluminum |
FEMALE HEALTH and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEMALE HEALTH and Kaiser Aluminum
The main advantage of trading using opposite FEMALE HEALTH and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEMALE HEALTH 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.| FEMALE HEALTH vs. SIVERS SEMICONDUCTORS AB | FEMALE HEALTH vs. Darden Restaurants | FEMALE HEALTH vs. Reliance Steel Aluminum | FEMALE HEALTH vs. Q2M Managementberatung AG |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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