Correlation Between Kaiser Aluminum and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Superior Plus 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 Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Superior Plus Corp, you can compare the effects of market volatilities on Kaiser Aluminum and Superior Plus 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 Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Superior Plus.
Diversification Opportunities for Kaiser Aluminum and Superior Plus
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kaiser and Superior is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp 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 Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Superior Plus go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Superior Plus
Assuming the 90 days trading horizon Kaiser Aluminum is expected to generate 0.63 times more return on investment than Superior Plus. However, Kaiser Aluminum is 1.59 times less risky than Superior Plus. It trades about 0.11 of its potential returns per unit of risk. Superior Plus Corp is currently generating about 0.02 per unit of risk. If you would invest 6,950 in Kaiser Aluminum on September 4, 2024 and sell it today you would earn a total of 500.00 from holding Kaiser Aluminum or generate 7.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kaiser Aluminum vs. Superior Plus Corp
Performance |
| Timeline |
| Kaiser Aluminum |
| Superior Plus Corp |
Kaiser Aluminum and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and Superior Plus
The main advantage of trading using opposite Kaiser Aluminum and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| Kaiser Aluminum vs. Silicon Motion Technology | Kaiser Aluminum vs. PTT Global Chemical | Kaiser Aluminum vs. Brockhaus Capital Management | Kaiser Aluminum vs. SEKISUI CHEMICAL |
| Superior Plus vs. Food Life Companies | Superior Plus vs. Mitsubishi Materials | Superior Plus vs. United Natural Foods | Superior Plus vs. NEWELL RUBBERMAID |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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