Correlation Between Kaiser Aluminum and Science Applications
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Science Applications 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 Science Applications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Science Applications International, you can compare the effects of market volatilities on Kaiser Aluminum and Science Applications 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 Science Applications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Science Applications.
Diversification Opportunities for Kaiser Aluminum and Science Applications
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kaiser and Science is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Science Applications Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Science Applications 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 Science Applications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Science Applications has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Science Applications go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Science Applications
Assuming the 90 days trading horizon Kaiser Aluminum is expected to generate 1.55 times more return on investment than Science Applications. However, Kaiser Aluminum is 1.55 times more volatile than Science Applications International. It trades about 0.02 of its potential returns per unit of risk. Science Applications International is currently generating about 0.02 per unit of risk. If you would invest 6,676 in Kaiser Aluminum on September 12, 2024 and sell it today you would earn a total of 674.00 from holding Kaiser Aluminum or generate 10.1% 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. Science Applications Internati
Performance |
| Timeline |
| Kaiser Aluminum |
| Science Applications |
Kaiser Aluminum and Science Applications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and Science Applications
The main advantage of trading using opposite Kaiser Aluminum and Science Applications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Science Applications 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 Science Applications will offset losses from the drop in Science Applications' 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 |
| Science Applications vs. Apple Inc | Science Applications vs. Apple Inc | Science Applications vs. Apple Inc | Science Applications vs. Apple Inc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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