Correlation Between Kaiser Aluminum and SunCoke Energy
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and SunCoke Energy 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 SunCoke Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and SunCoke Energy, you can compare the effects of market volatilities on Kaiser Aluminum and SunCoke Energy 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 SunCoke Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and SunCoke Energy.
Diversification Opportunities for Kaiser Aluminum and SunCoke Energy
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kaiser and SunCoke is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and SunCoke Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunCoke Energy 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 SunCoke Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunCoke Energy has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and SunCoke Energy go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and SunCoke Energy
Given the investment horizon of 90 days Kaiser Aluminum is expected to generate 0.95 times more return on investment than SunCoke Energy. However, Kaiser Aluminum is 1.05 times less risky than SunCoke Energy. It trades about 0.03 of its potential returns per unit of risk. SunCoke Energy is currently generating about -0.31 per unit of risk. If you would invest 6,949 in Kaiser Aluminum on November 4, 2024 and sell it today you would earn a total of 51.00 from holding Kaiser Aluminum or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaiser Aluminum vs. SunCoke Energy
Performance |
| Timeline |
| Kaiser Aluminum |
| SunCoke Energy |
Kaiser Aluminum and SunCoke Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and SunCoke Energy
The main advantage of trading using opposite Kaiser Aluminum and SunCoke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, SunCoke Energy 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 SunCoke Energy will offset losses from the drop in SunCoke Energy's long position.| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
| SunCoke Energy vs. Warrior Met Coal | SunCoke Energy vs. Alpha Metallurgical Resources | SunCoke Energy vs. American Resources Corp | SunCoke Energy vs. Ramaco Resources |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |