Correlation Between Kaiser Aluminum and Identiv
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Identiv 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 Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Identiv, you can compare the effects of market volatilities on Kaiser Aluminum and Identiv 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 Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Identiv.
Diversification Opportunities for Kaiser Aluminum and Identiv
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kaiser and Identiv is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv 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 Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Identiv go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Identiv
Assuming the 90 days trading horizon Kaiser Aluminum is expected to generate 0.69 times more return on investment than Identiv. However, Kaiser Aluminum is 1.45 times less risky than Identiv. It trades about 0.06 of its potential returns per unit of risk. Identiv is currently generating about -0.05 per unit of risk. If you would invest 5,319 in Kaiser Aluminum on September 4, 2024 and sell it today you would earn a total of 2,131 from holding Kaiser Aluminum or generate 40.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Kaiser Aluminum vs. Identiv
Performance |
| Timeline |
| Kaiser Aluminum |
| Identiv |
Kaiser Aluminum and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and Identiv
The main advantage of trading using opposite Kaiser Aluminum and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Identiv 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 Identiv will offset losses from the drop in Identiv's 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 |
| Identiv vs. SEALED AIR | Identiv vs. WIZZ AIR HLDGUNSPADR4 | Identiv vs. Alaska Air Group | Identiv vs. FORWARD AIR P |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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