Correlation Between Kaiser Aluminum and M3 Brigade
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and M3 Brigade 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 M3 Brigade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and M3 Brigade Acquisition V, you can compare the effects of market volatilities on Kaiser Aluminum and M3 Brigade 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 M3 Brigade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and M3 Brigade.
Diversification Opportunities for Kaiser Aluminum and M3 Brigade
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kaiser and MBAV is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and M3 Brigade Acquisition V in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M3 Brigade Acquisition 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 M3 Brigade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M3 Brigade Acquisition has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and M3 Brigade go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and M3 Brigade
Given the investment horizon of 90 days Kaiser Aluminum is expected to generate 28.8 times more return on investment than M3 Brigade. However, Kaiser Aluminum is 28.8 times more volatile than M3 Brigade Acquisition V. It trades about 0.02 of its potential returns per unit of risk. M3 Brigade Acquisition V is currently generating about 0.11 per unit of risk. If you would invest 7,706 in Kaiser Aluminum on September 4, 2024 and sell it today you would earn a total of 616.00 from holding Kaiser Aluminum or generate 7.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 10.1% |
| Values | Daily Returns |
Kaiser Aluminum vs. M3 Brigade Acquisition V
Performance |
| Timeline |
| Kaiser Aluminum |
| M3 Brigade Acquisition |
Kaiser Aluminum and M3 Brigade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and M3 Brigade
The main advantage of trading using opposite Kaiser Aluminum and M3 Brigade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, M3 Brigade 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 M3 Brigade will offset losses from the drop in M3 Brigade's long position.| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
| M3 Brigade vs. Distoken Acquisition | M3 Brigade vs. dMY Squared Technology | M3 Brigade vs. CO2 Energy Transition | M3 Brigade vs. Vine Hill Capital |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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