Correlation Between Kaiser Aluminum and NetApp
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and NetApp 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 NetApp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and NetApp Inc, you can compare the effects of market volatilities on Kaiser Aluminum and NetApp 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 NetApp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and NetApp.
Diversification Opportunities for Kaiser Aluminum and NetApp
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kaiser and NetApp is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and NetApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetApp 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 NetApp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetApp Inc has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and NetApp go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and NetApp
Assuming the 90 days trading horizon Kaiser Aluminum is expected to under-perform the NetApp. But the stock apears to be less risky and, when comparing its historical volatility, Kaiser Aluminum is 1.26 times less risky than NetApp. The stock trades about 0.0 of its potential returns per unit of risk. The NetApp Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 11,128 in NetApp Inc on November 4, 2024 and sell it today you would earn a total of 502.00 from holding NetApp Inc or generate 4.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaiser Aluminum vs. NetApp Inc
Performance |
| Timeline |
| Kaiser Aluminum |
| NetApp Inc |
Kaiser Aluminum and NetApp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and NetApp
The main advantage of trading using opposite Kaiser Aluminum and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, NetApp 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 NetApp will offset losses from the drop in NetApp's long position.| Kaiser Aluminum vs. FIRST SHIP LEASE | Kaiser Aluminum vs. Air Lease | Kaiser Aluminum vs. WILLIS LEASE FIN | Kaiser Aluminum vs. Urban Outfitters |
| NetApp vs. Casio Computer CoLtd | NetApp vs. COMPUTERSHARE | NetApp vs. Webster Financial | NetApp vs. BANKINTER ADR 2007 |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |