Correlation Between Kaiser Aluminum and GP Act
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and GP Act 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 GP Act into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and GP Act III Acquisition, you can compare the effects of market volatilities on Kaiser Aluminum and GP Act 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 GP Act. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and GP Act.
Diversification Opportunities for Kaiser Aluminum and GP Act
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kaiser and GPAT is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and GP Act III Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GP Act III 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 GP Act. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GP Act III has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and GP Act go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and GP Act
Given the investment horizon of 90 days Kaiser Aluminum is expected to generate 28.07 times more return on investment than GP Act. However, Kaiser Aluminum is 28.07 times more volatile than GP Act III Acquisition. It trades about 0.13 of its potential returns per unit of risk. GP Act III Acquisition is currently generating about 0.36 per unit of risk. If you would invest 7,737 in Kaiser Aluminum on September 5, 2024 and sell it today you would earn a total of 526.00 from holding Kaiser Aluminum or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kaiser Aluminum vs. GP Act III Acquisition
Performance |
| Timeline |
| Kaiser Aluminum |
| GP Act III |
Kaiser Aluminum and GP Act Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and GP Act
The main advantage of trading using opposite Kaiser Aluminum and GP Act positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, GP Act 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 GP Act will offset losses from the drop in GP Act's long position.| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
| GP Act vs. Tscan Therapeutics | GP Act vs. CECO Environmental Corp | GP Act vs. Spyre Therapeutics | GP Act vs. Kaiser Aluminum |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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