Correlation Between Kaiser Aluminum and Sekisui Chemical
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Sekisui Chemical 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 Sekisui Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Sekisui Chemical Co, you can compare the effects of market volatilities on Kaiser Aluminum and Sekisui Chemical 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 Sekisui Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Sekisui Chemical.
Diversification Opportunities for Kaiser Aluminum and Sekisui Chemical
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kaiser and Sekisui is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Sekisui Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui Chemical 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 Sekisui Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekisui Chemical has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Sekisui Chemical go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Sekisui Chemical
Assuming the 90 days trading horizon Kaiser Aluminum is expected to generate 1.63 times more return on investment than Sekisui Chemical. However, Kaiser Aluminum is 1.63 times more volatile than Sekisui Chemical Co. It trades about 0.1 of its potential returns per unit of risk. Sekisui Chemical Co is currently generating about 0.11 per unit of risk. If you would invest 6,322 in Kaiser Aluminum on September 4, 2024 and sell it today you would earn a total of 1,128 from holding Kaiser Aluminum or generate 17.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Kaiser Aluminum vs. Sekisui Chemical Co
Performance |
| Timeline |
| Kaiser Aluminum |
| Sekisui Chemical |
Kaiser Aluminum and Sekisui Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and Sekisui Chemical
The main advantage of trading using opposite Kaiser Aluminum and Sekisui Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Sekisui Chemical 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 Sekisui Chemical will offset losses from the drop in Sekisui Chemical'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 |
| Sekisui Chemical vs. BARRATT DEVEL UNSPADR2 | Sekisui Chemical vs. Superior Plus Corp | Sekisui Chemical vs. NMI Holdings | Sekisui Chemical vs. Origin Agritech |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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