Correlation Between Kaiser Aluminum and Tradegate
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Tradegate 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 Tradegate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Tradegate AG Wertpapierhandelsbank, you can compare the effects of market volatilities on Kaiser Aluminum and Tradegate 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 Tradegate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Tradegate.
Diversification Opportunities for Kaiser Aluminum and Tradegate
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kaiser and Tradegate is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Tradegate AG Wertpapierhandels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradegate AG Wertpap 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 Tradegate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradegate AG Wertpap has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Tradegate go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Tradegate
Assuming the 90 days trading horizon Kaiser Aluminum is expected to generate 2.38 times more return on investment than Tradegate. However, Kaiser Aluminum is 2.38 times more volatile than Tradegate AG Wertpapierhandelsbank. It trades about 0.02 of its potential returns per unit of risk. Tradegate AG Wertpapierhandelsbank is currently generating about -0.03 per unit of risk. If you would invest 7,179 in Kaiser Aluminum on September 5, 2024 and sell it today you would earn a total of 271.00 from holding Kaiser Aluminum or generate 3.77% 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. Tradegate AG Wertpapierhandels
Performance |
| Timeline |
| Kaiser Aluminum |
| Tradegate AG Wertpap |
Kaiser Aluminum and Tradegate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and Tradegate
The main advantage of trading using opposite Kaiser Aluminum and Tradegate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Tradegate 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 Tradegate will offset losses from the drop in Tradegate's long position.| Kaiser Aluminum vs. COMINTL BANK ADR1 | Kaiser Aluminum vs. CDN IMPERIAL BANK | Kaiser Aluminum vs. United States Steel | Kaiser Aluminum vs. Commonwealth Bank of |
| Tradegate vs. Tencent Music Entertainment | Tradegate vs. UNIVMUSIC GRPADR050 | Tradegate vs. Kaiser Aluminum | Tradegate vs. ETFS Coffee ETC |
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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