Correlation Between Kaiser Aluminum and Titan International
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Titan International 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 Titan International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Titan International, you can compare the effects of market volatilities on Kaiser Aluminum and Titan International 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 Titan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Titan International.
Diversification Opportunities for Kaiser Aluminum and Titan International
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kaiser and Titan is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Titan International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan International 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 Titan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan International has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Titan International go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Titan International
Given the investment horizon of 90 days Kaiser Aluminum is expected to generate 0.91 times more return on investment than Titan International. However, Kaiser Aluminum is 1.1 times less risky than Titan International. It trades about 0.02 of its potential returns per unit of risk. Titan International is currently generating about -0.03 per unit of risk. If you would invest 7,754 in Kaiser Aluminum on August 24, 2024 and sell it today you would earn a total of 364.00 from holding Kaiser Aluminum or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaiser Aluminum vs. Titan International
Performance |
| Timeline |
| Kaiser Aluminum |
| Titan International |
Kaiser Aluminum and Titan International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and Titan International
The main advantage of trading using opposite Kaiser Aluminum and Titan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Titan International 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 Titan International will offset losses from the drop in Titan International's long position.| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
| Titan International vs. Shyft Group | Titan International vs. Manitowoc | Titan International vs. Oshkosh | Titan International vs. Terex |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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