Correlation Between Kaiser Aluminum and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Grupo Simec 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 Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Grupo Simec SAB, you can compare the effects of market volatilities on Kaiser Aluminum and Grupo Simec 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 Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Grupo Simec.
Diversification Opportunities for Kaiser Aluminum and Grupo Simec
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kaiser and Grupo is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Grupo Simec SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Simec SAB 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 Grupo Simec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Simec SAB has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Grupo Simec go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Grupo Simec
Given the investment horizon of 90 days Kaiser Aluminum is expected to generate 0.87 times more return on investment than Grupo Simec. However, Kaiser Aluminum is 1.14 times less risky than Grupo Simec. It trades about 0.03 of its potential returns per unit of risk. Grupo Simec SAB is currently generating about -0.02 per unit of risk. If you would invest 6,885 in Kaiser Aluminum on November 2, 2024 and sell it today you would earn a total of 230.00 from holding Kaiser Aluminum or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.29% |
| Values | Daily Returns |
Kaiser Aluminum vs. Grupo Simec SAB
Performance |
| Timeline |
| Kaiser Aluminum |
| Grupo Simec SAB |
Kaiser Aluminum and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and Grupo Simec
The main advantage of trading using opposite Kaiser Aluminum and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Grupo Simec 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 Grupo Simec will offset losses from the drop in Grupo Simec's long position.| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
| Grupo Simec vs. Synalloy | Grupo Simec vs. Mesabi Trust | Grupo Simec vs. Algoma Steel Group | Grupo Simec vs. Olympic Steel |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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