Correlation Between Flexible Solutions and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both Flexible Solutions 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 Flexible Solutions and Kaiser Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexible Solutions International and Kaiser Aluminum, you can compare the effects of market volatilities on Flexible Solutions 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 Flexible Solutions with a short position of Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Solutions and Kaiser Aluminum.
Diversification Opportunities for Flexible Solutions and Kaiser Aluminum
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flexible and Kaiser is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum and Flexible Solutions 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 Flexible Solutions International 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 Flexible Solutions i.e., Flexible Solutions and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between Flexible Solutions and Kaiser Aluminum
Considering the 90-day investment horizon Flexible Solutions is expected to generate 1.08 times less return on investment than Kaiser Aluminum. In addition to that, Flexible Solutions is 1.36 times more volatile than Kaiser Aluminum. It trades about 0.08 of its total potential returns per unit of risk. Kaiser Aluminum is currently generating about 0.12 per unit of volatility. If you would invest 7,169 in Kaiser Aluminum on August 30, 2024 and sell it today you would earn a total of 997.00 from holding Kaiser Aluminum or generate 13.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexible Solutions Internation vs. Kaiser Aluminum
Performance |
| Timeline |
| Flexible Solutions |
| Kaiser Aluminum |
Flexible Solutions and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexible Solutions and Kaiser Aluminum
The main advantage of trading using opposite Flexible Solutions and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Solutions 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.| Flexible Solutions vs. Orion Engineered Carbons | Flexible Solutions vs. International Flavors Fragrances | Flexible Solutions vs. Sociedad Quimica y | Flexible Solutions vs. Albemarle Corp |
| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |