Correlation Between Kaiser Aluminum and Nuvalent
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Nuvalent 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 Nuvalent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Nuvalent, you can compare the effects of market volatilities on Kaiser Aluminum and Nuvalent 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 Nuvalent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Nuvalent.
Diversification Opportunities for Kaiser Aluminum and Nuvalent
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kaiser and Nuvalent is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Nuvalent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuvalent 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 Nuvalent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuvalent has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Nuvalent go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Nuvalent
Given the investment horizon of 90 days Kaiser Aluminum is expected to generate 1.36 times more return on investment than Nuvalent. However, Kaiser Aluminum is 1.36 times more volatile than Nuvalent. It trades about 0.19 of its potential returns per unit of risk. Nuvalent is currently generating about 0.09 per unit of risk. If you would invest 7,607 in Kaiser Aluminum on August 28, 2024 and sell it today you would earn a total of 771.00 from holding Kaiser Aluminum or generate 10.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaiser Aluminum vs. Nuvalent
Performance |
| Timeline |
| Kaiser Aluminum |
| Nuvalent |
Kaiser Aluminum and Nuvalent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and Nuvalent
The main advantage of trading using opposite Kaiser Aluminum and Nuvalent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Nuvalent 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 Nuvalent will offset losses from the drop in Nuvalent's long position.| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
| Nuvalent vs. Eliem Therapeutics | Nuvalent vs. HCW Biologics | Nuvalent vs. Scpharmaceuticals | Nuvalent vs. Milestone Pharmaceuticals |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Stocks Directory Find actively traded stocks across global markets |