Correlation Between Kaiser Aluminum and EURASIAN MINERALS
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and EURASIAN MINERALS 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 EURASIAN MINERALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and EURASIAN MINERALS, you can compare the effects of market volatilities on Kaiser Aluminum and EURASIAN MINERALS 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 EURASIAN MINERALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and EURASIAN MINERALS.
Diversification Opportunities for Kaiser Aluminum and EURASIAN MINERALS
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kaiser and EURASIAN is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and EURASIAN MINERALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EURASIAN MINERALS 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 EURASIAN MINERALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EURASIAN MINERALS has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and EURASIAN MINERALS go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and EURASIAN MINERALS
Assuming the 90 days trading horizon Kaiser Aluminum is expected to under-perform the EURASIAN MINERALS. But the stock apears to be less risky and, when comparing its historical volatility, Kaiser Aluminum is 1.11 times less risky than EURASIAN MINERALS. The stock trades about -0.34 of its potential returns per unit of risk. The EURASIAN MINERALS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 166.00 in EURASIAN MINERALS on September 29, 2024 and sell it today you would earn a total of 4.00 from holding EURASIAN MINERALS or generate 2.41% 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. EURASIAN MINERALS
Performance |
| Timeline |
| Kaiser Aluminum |
| EURASIAN MINERALS |
Kaiser Aluminum and EURASIAN MINERALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and EURASIAN MINERALS
The main advantage of trading using opposite Kaiser Aluminum and EURASIAN MINERALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, EURASIAN MINERALS 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 EURASIAN MINERALS will offset losses from the drop in EURASIAN MINERALS's long position.| Kaiser Aluminum vs. ALTAIR RES INC | Kaiser Aluminum vs. Coeur Mining | Kaiser Aluminum vs. MCEWEN MINING INC | Kaiser Aluminum vs. GRIFFIN MINING LTD |
| EURASIAN MINERALS vs. GALENA MINING LTD | EURASIAN MINERALS vs. Chesapeake Utilities | EURASIAN MINERALS vs. GRIFFIN MINING LTD | EURASIAN MINERALS vs. Kaiser Aluminum |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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