Correlation Between Klckner Co and Alien Metals
Can any of the company-specific risk be diversified away by investing in both Klckner Co and Alien Metals 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 Klckner Co and Alien Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Klckner Co SE and Alien Metals, you can compare the effects of market volatilities on Klckner Co and Alien Metals 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 Klckner Co with a short position of Alien Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klckner Co and Alien Metals.
Diversification Opportunities for Klckner Co and Alien Metals
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Klckner and Alien is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Klckner Co SE and Alien Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alien Metals and Klckner Co 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 Klckner Co SE are associated (or correlated) with Alien Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alien Metals has no effect on the direction of Klckner Co i.e., Klckner Co and Alien Metals go up and down completely randomly.
Pair Corralation between Klckner Co and Alien Metals
Assuming the 90 days horizon Klckner Co SE is expected to under-perform the Alien Metals. But the pink sheet apears to be less risky and, when comparing its historical volatility, Klckner Co SE is 40.35 times less risky than Alien Metals. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Alien Metals is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 0.53 in Alien Metals on August 25, 2024 and sell it today you would lose (0.44) from holding Alien Metals or give up 83.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 88.42% |
| Values | Daily Returns |
Klckner Co SE vs. Alien Metals
Performance |
| Timeline |
| Klckner Co SE |
| Alien Metals |
Klckner Co and Alien Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klckner Co and Alien Metals
The main advantage of trading using opposite Klckner Co and Alien Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klckner Co position performs unexpectedly, Alien Metals 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 Alien Metals will offset losses from the drop in Alien Metals' long position.| Klckner Co vs. Olympic Steel | Klckner Co vs. Mesabi Trust | Klckner Co vs. Universal Stainless Alloy | Klckner Co vs. POSCO Holdings |
| Alien Metals vs. Morningstar Unconstrained Allocation | Alien Metals vs. High Yield Municipal Fund | Alien Metals vs. Knife River | Alien Metals vs. Klckner Co SE |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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