Correlation Between Kaiser Aluminum and Treasury Wine
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Treasury Wine 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 Treasury Wine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Treasury Wine Estates, you can compare the effects of market volatilities on Kaiser Aluminum and Treasury Wine 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 Treasury Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Treasury Wine.
Diversification Opportunities for Kaiser Aluminum and Treasury Wine
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kaiser and Treasury is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Treasury Wine Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treasury Wine Estates 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 Treasury Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treasury Wine Estates has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Treasury Wine go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Treasury Wine
Assuming the 90 days trading horizon Kaiser Aluminum is expected to generate 1.47 times more return on investment than Treasury Wine. However, Kaiser Aluminum is 1.47 times more volatile than Treasury Wine Estates. It trades about 0.02 of its potential returns per unit of risk. Treasury Wine Estates is currently generating about 0.0 per unit of risk. If you would invest 7,179 in Kaiser Aluminum on September 4, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaiser Aluminum vs. Treasury Wine Estates
Performance |
| Timeline |
| Kaiser Aluminum |
| Treasury Wine Estates |
Kaiser Aluminum and Treasury Wine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and Treasury Wine
The main advantage of trading using opposite Kaiser Aluminum and Treasury Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Treasury Wine 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 Treasury Wine will offset losses from the drop in Treasury Wine'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 |
| Treasury Wine vs. Tsingtao Brewery | Treasury Wine vs. BLUESCOPE STEEL | Treasury Wine vs. Fevertree Drinks PLC | Treasury Wine vs. EHEALTH |
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 Stocks Directory module to find actively traded stocks across global markets.
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