Correlation Between Kaiser Aluminum and SEI Investments
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and SEI Investments 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 SEI Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and SEI Investments, you can compare the effects of market volatilities on Kaiser Aluminum and SEI Investments 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 SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and SEI Investments.
Diversification Opportunities for Kaiser Aluminum and SEI Investments
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kaiser and SEI is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments 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 SEI Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI Investments has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and SEI Investments go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and SEI Investments
Given the investment horizon of 90 days Kaiser Aluminum is expected to generate 0.8 times more return on investment than SEI Investments. However, Kaiser Aluminum is 1.25 times less risky than SEI Investments. It trades about 0.32 of its potential returns per unit of risk. SEI Investments is currently generating about 0.07 per unit of risk. If you would invest 6,978 in Kaiser Aluminum on October 21, 2024 and sell it today you would earn a total of 390.00 from holding Kaiser Aluminum or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaiser Aluminum vs. SEI Investments
Performance |
| Timeline |
| Kaiser Aluminum |
| SEI Investments |
Kaiser Aluminum and SEI Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and SEI Investments
The main advantage of trading using opposite Kaiser Aluminum and SEI Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, SEI Investments 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 SEI Investments will offset losses from the drop in SEI Investments' long position.| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
| SEI Investments vs. Commerce Bancshares | SEI Investments vs. RLI Corp | SEI Investments vs. Westamerica Bancorporation | SEI Investments vs. Brown Brown |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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