Correlation Between Kaiser Aluminum and Corning Incorporated
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Corning Incorporated 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 Corning Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Corning Incorporated, you can compare the effects of market volatilities on Kaiser Aluminum and Corning Incorporated 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 Corning Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Corning Incorporated.
Diversification Opportunities for Kaiser Aluminum and Corning Incorporated
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kaiser and Corning is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Corning Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corning Incorporated 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 Corning Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corning Incorporated has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Corning Incorporated go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Corning Incorporated
Given the investment horizon of 90 days Kaiser Aluminum is expected to under-perform the Corning Incorporated. In addition to that, Kaiser Aluminum is 1.27 times more volatile than Corning Incorporated. It trades about -0.38 of its total potential returns per unit of risk. Corning Incorporated is currently generating about 0.01 per unit of volatility. If you would invest 4,763 in Corning Incorporated on October 12, 2024 and sell it today you would earn a total of 10.00 from holding Corning Incorporated or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaiser Aluminum vs. Corning Incorporated
Performance |
| Timeline |
| Kaiser Aluminum |
| Corning Incorporated |
Kaiser Aluminum and Corning Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and Corning Incorporated
The main advantage of trading using opposite Kaiser Aluminum and Corning Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Corning Incorporated 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 Corning Incorporated will offset losses from the drop in Corning Incorporated's long position.| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
| Corning Incorporated vs. OSI Systems | Corning Incorporated vs. Fabrinet | Corning Incorporated vs. Jabil Circuit | Corning Incorporated vs. Vicor |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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