Correlation Between Kaiser Aluminum and Allient
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Allient 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 Kaiser Aluminum and Allient into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Allient, you can compare the effects of market volatilities on Kaiser Aluminum and Allient 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 Kaiser Aluminum with a short position of Allient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Allient.
Diversification Opportunities for Kaiser Aluminum and Allient
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kaiser and Allient is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient and Kaiser Aluminum 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 Kaiser Aluminum are associated (or correlated) with Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Allient go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Allient
Given the investment horizon of 90 days Kaiser Aluminum is expected to generate 0.86 times more return on investment than Allient. However, Kaiser Aluminum is 1.16 times less risky than Allient. It trades about 0.07 of its potential returns per unit of risk. Allient is currently generating about 0.01 per unit of risk. If you would invest 5,668 in Kaiser Aluminum on September 2, 2024 and sell it today you would earn a total of 2,460 from holding Kaiser Aluminum or generate 43.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaiser Aluminum vs. Allient
Performance |
| Timeline |
| Kaiser Aluminum |
| Allient |
Kaiser Aluminum and Allient Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and Allient
The main advantage of trading using opposite Kaiser Aluminum and Allient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Allient 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 Allient will offset losses from the drop in Allient's long position.| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
| Allient vs. Shenzhen Genvict Technologies | Allient vs. Topsec Technologies Group | Allient vs. Genus Power Infrastructures | Allient vs. Risuntek |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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