Correlation Between Kaiser Aluminum and TKB Critical
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and TKB Critical 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 TKB Critical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and TKB Critical Technologies, you can compare the effects of market volatilities on Kaiser Aluminum and TKB Critical 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 TKB Critical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and TKB Critical.
Diversification Opportunities for Kaiser Aluminum and TKB Critical
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kaiser and TKB is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and TKB Critical Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TKB Critical Technologies 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 TKB Critical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TKB Critical Technologies has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and TKB Critical go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and TKB Critical
If you would invest 6,951 in Kaiser Aluminum on November 5, 2024 and sell it today you would earn a total of 49.00 from holding Kaiser Aluminum or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.26% |
| Values | Daily Returns |
Kaiser Aluminum vs. TKB Critical Technologies
Performance |
| Timeline |
| Kaiser Aluminum |
| TKB Critical Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kaiser Aluminum and TKB Critical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and TKB Critical
The main advantage of trading using opposite Kaiser Aluminum and TKB Critical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, TKB Critical 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 TKB Critical will offset losses from the drop in TKB Critical's long position.| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
| TKB Critical vs. Anterix | TKB Critical vs. Cheche Group Class | TKB Critical vs. Olympic Steel | TKB Critical vs. National CineMedia |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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