Correlation Between Kaiser Aluminum and Hamilton Insurance
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Hamilton Insurance 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 Hamilton Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Hamilton Insurance Group,, you can compare the effects of market volatilities on Kaiser Aluminum and Hamilton Insurance 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 Hamilton Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Hamilton Insurance.
Diversification Opportunities for Kaiser Aluminum and Hamilton Insurance
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kaiser and Hamilton is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Hamilton Insurance Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Insurance Group, 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 Hamilton Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Insurance Group, has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Hamilton Insurance go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Hamilton Insurance
Given the investment horizon of 90 days Kaiser Aluminum is expected to generate 1.22 times less return on investment than Hamilton Insurance. In addition to that, Kaiser Aluminum is 1.2 times more volatile than Hamilton Insurance Group,. It trades about 0.04 of its total potential returns per unit of risk. Hamilton Insurance Group, is currently generating about 0.05 per unit of volatility. If you would invest 1,500 in Hamilton Insurance Group, on September 2, 2024 and sell it today you would earn a total of 408.00 from holding Hamilton Insurance Group, or generate 27.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 71.77% |
| Values | Daily Returns |
Kaiser Aluminum vs. Hamilton Insurance Group,
Performance |
| Timeline |
| Kaiser Aluminum |
| Hamilton Insurance Group, |
Kaiser Aluminum and Hamilton Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and Hamilton Insurance
The main advantage of trading using opposite Kaiser Aluminum and Hamilton Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Hamilton Insurance 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 Hamilton Insurance will offset losses from the drop in Hamilton Insurance's long position.| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
| Hamilton Insurance vs. Fidus Investment Corp | Hamilton Insurance vs. NetSol Technologies | Hamilton Insurance vs. SEI Investments | Hamilton Insurance vs. Cadence Design Systems |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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