Correlation Between Kaiser Aluminum and SWISS WATER
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and SWISS WATER 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 SWISS WATER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and SWISS WATER DECAFFCOFFEE, you can compare the effects of market volatilities on Kaiser Aluminum and SWISS WATER 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 SWISS WATER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and SWISS WATER.
Diversification Opportunities for Kaiser Aluminum and SWISS WATER
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kaiser and SWISS is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and SWISS WATER DECAFFCOFFEE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWISS WATER DECAFFCOFFEE 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 SWISS WATER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWISS WATER DECAFFCOFFEE has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and SWISS WATER go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and SWISS WATER
Assuming the 90 days trading horizon Kaiser Aluminum is expected to generate 1.21 times less return on investment than SWISS WATER. In addition to that, Kaiser Aluminum is 1.0 times more volatile than SWISS WATER DECAFFCOFFEE. It trades about 0.05 of its total potential returns per unit of risk. SWISS WATER DECAFFCOFFEE is currently generating about 0.06 per unit of volatility. If you would invest 193.00 in SWISS WATER DECAFFCOFFEE on September 12, 2024 and sell it today you would earn a total of 69.00 from holding SWISS WATER DECAFFCOFFEE or generate 35.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaiser Aluminum vs. SWISS WATER DECAFFCOFFEE
Performance |
| Timeline |
| Kaiser Aluminum |
| SWISS WATER DECAFFCOFFEE |
Kaiser Aluminum and SWISS WATER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and SWISS WATER
The main advantage of trading using opposite Kaiser Aluminum and SWISS WATER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, SWISS WATER 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 SWISS WATER will offset losses from the drop in SWISS WATER's long position.| Kaiser Aluminum vs. Tencent Music Entertainment | Kaiser Aluminum vs. Vastned Retail NV | Kaiser Aluminum vs. MARKET VECTR RETAIL | Kaiser Aluminum vs. PLAYSTUDIOS A DL 0001 |
| SWISS WATER vs. Chongqing Machinery Electric | SWISS WATER vs. Insteel Industries | SWISS WATER vs. RELIANCE STEEL AL | SWISS WATER vs. Hitachi Construction Machinery |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |