Correlation Between Kaiser Aluminum and Tokyu
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Tokyu 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 Tokyu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Tokyu, you can compare the effects of market volatilities on Kaiser Aluminum and Tokyu 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 Tokyu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Tokyu.
Diversification Opportunities for Kaiser Aluminum and Tokyu
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kaiser and Tokyu is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Tokyu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyu 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 Tokyu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyu has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Tokyu go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Tokyu
Given the investment horizon of 90 days Kaiser Aluminum is expected to generate 4.32 times more return on investment than Tokyu. However, Kaiser Aluminum is 4.32 times more volatile than Tokyu. It trades about 0.07 of its potential returns per unit of risk. Tokyu is currently generating about -0.07 per unit of risk. If you would invest 5,764 in Kaiser Aluminum on September 3, 2024 and sell it today you would earn a total of 2,364 from holding Kaiser Aluminum or generate 41.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.78% |
| Values | Daily Returns |
Kaiser Aluminum vs. Tokyu
Performance |
| Timeline |
| Kaiser Aluminum |
| Tokyu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kaiser Aluminum and Tokyu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and Tokyu
The main advantage of trading using opposite Kaiser Aluminum and Tokyu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Tokyu 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 Tokyu will offset losses from the drop in Tokyu's long position.| Kaiser Aluminum vs. SPACE | Kaiser Aluminum vs. Ampleforth | Kaiser Aluminum vs. ionet | Kaiser Aluminum vs. Memecoin |
| Tokyu vs. Skechers USA | Tokyu vs. ArcelorMittal SA ADR | Tokyu vs. Kaiser Aluminum | Tokyu vs. Lincoln Electric Holdings |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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