Correlation Between Kaiser Aluminum and SLR Investment
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and SLR Investment 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 SLR Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and SLR Investment Corp, you can compare the effects of market volatilities on Kaiser Aluminum and SLR Investment 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 SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and SLR Investment.
Diversification Opportunities for Kaiser Aluminum and SLR Investment
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kaiser and SLR is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment Corp 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 SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and SLR Investment go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and SLR Investment
Assuming the 90 days trading horizon Kaiser Aluminum is expected to generate 1.75 times more return on investment than SLR Investment. However, Kaiser Aluminum is 1.75 times more volatile than SLR Investment Corp. It trades about 0.22 of its potential returns per unit of risk. SLR Investment Corp is currently generating about 0.15 per unit of risk. If you would invest 6,525 in Kaiser Aluminum on October 29, 2024 and sell it today you would earn a total of 375.00 from holding Kaiser Aluminum or generate 5.75% 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. SLR Investment Corp
Performance |
| Timeline |
| Kaiser Aluminum |
| SLR Investment Corp |
Kaiser Aluminum and SLR Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and SLR Investment
The main advantage of trading using opposite Kaiser Aluminum and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, SLR Investment 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 SLR Investment will offset losses from the drop in SLR Investment's long position.| Kaiser Aluminum vs. NorAm Drilling AS | Kaiser Aluminum vs. Ebro Foods SA | Kaiser Aluminum vs. Lery Seafood Group | Kaiser Aluminum vs. AWILCO DRILLING PLC |
| SLR Investment vs. LOANDEPOT INC A | SLR Investment vs. ALBIS LEASING AG | SLR Investment vs. Cardinal Health | SLR Investment vs. RCI Hospitality Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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