Correlation Between Western Copper and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both Western Copper and Kaiser Aluminum 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 Western Copper and Kaiser Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Copper and and Kaiser Aluminum, you can compare the effects of market volatilities on Western Copper and Kaiser Aluminum 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 Western Copper with a short position of Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Kaiser Aluminum.
Diversification Opportunities for Western Copper and Kaiser Aluminum
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Kaiser is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum and Western Copper 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 Western Copper and are associated (or correlated) with Kaiser Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaiser Aluminum has no effect on the direction of Western Copper i.e., Western Copper and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between Western Copper and Kaiser Aluminum
Considering the 90-day investment horizon Western Copper and is expected to under-perform the Kaiser Aluminum. In addition to that, Western Copper is 1.22 times more volatile than Kaiser Aluminum. It trades about -0.02 of its total potential returns per unit of risk. Kaiser Aluminum is currently generating about 0.03 per unit of volatility. If you would invest 6,885 in Kaiser Aluminum on November 2, 2024 and sell it today you would earn a total of 230.00 from holding Kaiser Aluminum or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. Kaiser Aluminum
Performance |
| Timeline |
| Western Copper |
| Kaiser Aluminum |
Western Copper and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Kaiser Aluminum
The main advantage of trading using opposite Western Copper and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, Kaiser Aluminum 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 Kaiser Aluminum will offset losses from the drop in Kaiser Aluminum's long position.| Western Copper vs. Fury Gold Mines | Western Copper vs. EMX Royalty Corp | Western Copper vs. Nevada King Gold | Western Copper vs. Aftermath Silver |
| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Correlations Find global opportunities by holding instruments from different markets |