Correlation Between Galiano Gold and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both Galiano Gold 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 Galiano Gold and Kaiser Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galiano Gold and Kaiser Aluminum, you can compare the effects of market volatilities on Galiano Gold 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 Galiano Gold with a short position of Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galiano Gold and Kaiser Aluminum.
Diversification Opportunities for Galiano Gold and Kaiser Aluminum
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Galiano and Kaiser is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Galiano Gold and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum and Galiano Gold 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 Galiano Gold 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 Galiano Gold i.e., Galiano Gold and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between Galiano Gold and Kaiser Aluminum
Considering the 90-day investment horizon Galiano Gold is expected to under-perform the Kaiser Aluminum. In addition to that, Galiano Gold is 2.61 times more volatile than Kaiser Aluminum. It trades about -0.13 of its total potential returns per unit of risk. Kaiser Aluminum is currently generating about -0.19 per unit of volatility. If you would invest 8,180 in Kaiser Aluminum on September 14, 2024 and sell it today you would lose (439.00) from holding Kaiser Aluminum or give up 5.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Galiano Gold vs. Kaiser Aluminum
Performance |
| Timeline |
| Galiano Gold |
| Kaiser Aluminum |
Galiano Gold and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galiano Gold and Kaiser Aluminum
The main advantage of trading using opposite Galiano Gold and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galiano Gold 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.| Galiano Gold vs. Avino Silver Gold | Galiano Gold vs. Americas Silver Corp | Galiano Gold vs. Paramount Gold Nevada | Galiano Gold vs. Fury Gold Mines |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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