Correlation Between Kaiser Aluminum and Portillos
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Portillos 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 Portillos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Portillos, you can compare the effects of market volatilities on Kaiser Aluminum and Portillos 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 Portillos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Portillos.
Diversification Opportunities for Kaiser Aluminum and Portillos
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kaiser and Portillos is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Portillos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Portillos 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 Portillos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Portillos has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Portillos go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Portillos
Given the investment horizon of 90 days Kaiser Aluminum is expected to generate 3.48 times less return on investment than Portillos. But when comparing it to its historical volatility, Kaiser Aluminum is 1.41 times less risky than Portillos. It trades about 0.03 of its potential returns per unit of risk. Portillos is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,198 in Portillos on November 2, 2024 and sell it today you would earn a total of 196.00 from holding Portillos or generate 16.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaiser Aluminum vs. Portillos
Performance |
| Timeline |
| Kaiser Aluminum |
| Portillos |
Kaiser Aluminum and Portillos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and Portillos
The main advantage of trading using opposite Kaiser Aluminum and Portillos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Portillos 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 Portillos will offset losses from the drop in Portillos' long position.| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
| Portillos vs. Brinker International | Portillos vs. Bloomin Brands | Portillos vs. Wingstop | Portillos vs. Papa Johns International |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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