Correlation Between Kaiser Aluminum and Vita Coco
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Vita Coco 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 Vita Coco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Vita Coco, you can compare the effects of market volatilities on Kaiser Aluminum and Vita Coco 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 Vita Coco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Vita Coco.
Diversification Opportunities for Kaiser Aluminum and Vita Coco
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kaiser and Vita is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Vita Coco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vita Coco 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 Vita Coco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vita Coco has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Vita Coco go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Vita Coco
Given the investment horizon of 90 days Kaiser Aluminum is expected to generate 1.03 times more return on investment than Vita Coco. However, Kaiser Aluminum is 1.03 times more volatile than Vita Coco. It trades about 0.07 of its potential returns per unit of risk. Vita Coco is currently generating about 0.05 per unit of risk. If you would invest 5,580 in Kaiser Aluminum on August 24, 2024 and sell it today you would earn a total of 2,709 from holding Kaiser Aluminum or generate 48.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaiser Aluminum vs. Vita Coco
Performance |
| Timeline |
| Kaiser Aluminum |
| Vita Coco |
Kaiser Aluminum and Vita Coco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and Vita Coco
The main advantage of trading using opposite Kaiser Aluminum and Vita Coco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Vita Coco 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 Vita Coco will offset losses from the drop in Vita Coco's long position.| Kaiser Aluminum vs. Eshallgo Class A | Kaiser Aluminum vs. Amtech Systems | Kaiser Aluminum vs. Gold Fields Ltd | Kaiser Aluminum vs. Aegean Airlines SA |
| Vita Coco vs. Coca Cola Femsa SAB | Vita Coco vs. Coca Cola European Partners | Vita Coco vs. Embotelladora Andina SA | Vita Coco vs. Monster Beverage 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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