Correlation Between Gold Fields and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both Gold Fields 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 Gold Fields and Kaiser Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Fields Ltd and Kaiser Aluminum, you can compare the effects of market volatilities on Gold Fields 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 Gold Fields with a short position of Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Kaiser Aluminum.
Diversification Opportunities for Gold Fields and Kaiser Aluminum
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gold and Kaiser is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum and Gold Fields 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 Gold Fields Ltd 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 Gold Fields i.e., Gold Fields and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between Gold Fields and Kaiser Aluminum
Considering the 90-day investment horizon Gold Fields Ltd is expected to generate 1.1 times more return on investment than Kaiser Aluminum. However, Gold Fields is 1.1 times more volatile than Kaiser Aluminum. It trades about 0.04 of its potential returns per unit of risk. Kaiser Aluminum is currently generating about 0.02 per unit of risk. If you would invest 1,048 in Gold Fields Ltd on August 28, 2024 and sell it today you would earn a total of 425.00 from holding Gold Fields Ltd or generate 40.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Fields Ltd vs. Kaiser Aluminum
Performance |
| Timeline |
| Gold Fields |
| Kaiser Aluminum |
Gold Fields and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Kaiser Aluminum
The main advantage of trading using opposite Gold Fields and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields 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.| Gold Fields vs. Agnico Eagle Mines | Gold Fields vs. Kinross Gold | Gold Fields vs. Harmony Gold Mining | Gold Fields vs. Franco Nevada |
| 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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