Correlation Between Kaiser Aluminum and COREBRIDGE FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and COREBRIDGE FINANCIAL 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 COREBRIDGE FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and COREBRIDGE FINANCIAL INC, you can compare the effects of market volatilities on Kaiser Aluminum and COREBRIDGE FINANCIAL 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 COREBRIDGE FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and COREBRIDGE FINANCIAL.
Diversification Opportunities for Kaiser Aluminum and COREBRIDGE FINANCIAL
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kaiser and COREBRIDGE is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and COREBRIDGE FINANCIAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COREBRIDGE FINANCIAL INC 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 COREBRIDGE FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COREBRIDGE FINANCIAL INC has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and COREBRIDGE FINANCIAL go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and COREBRIDGE FINANCIAL
Assuming the 90 days trading horizon Kaiser Aluminum is expected to generate 1.64 times less return on investment than COREBRIDGE FINANCIAL. But when comparing it to its historical volatility, Kaiser Aluminum is 1.07 times less risky than COREBRIDGE FINANCIAL. It trades about 0.19 of its potential returns per unit of risk. COREBRIDGE FINANCIAL INC is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2,860 in COREBRIDGE FINANCIAL INC on October 30, 2024 and sell it today you would earn a total of 240.00 from holding COREBRIDGE FINANCIAL INC or generate 8.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaiser Aluminum vs. COREBRIDGE FINANCIAL INC
Performance |
| Timeline |
| Kaiser Aluminum |
| COREBRIDGE FINANCIAL INC |
Kaiser Aluminum and COREBRIDGE FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and COREBRIDGE FINANCIAL
The main advantage of trading using opposite Kaiser Aluminum and COREBRIDGE FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, COREBRIDGE FINANCIAL 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 COREBRIDGE FINANCIAL will offset losses from the drop in COREBRIDGE FINANCIAL's long position.| Kaiser Aluminum vs. FIREWEED METALS P | Kaiser Aluminum vs. Ringmetall SE | Kaiser Aluminum vs. ECHO INVESTMENT ZY | Kaiser Aluminum vs. MidCap Financial Investment |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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