Correlation Between Lerøy Seafood and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both Lerøy Seafood 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 Lerøy Seafood and Kaiser Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lery Seafood Group and Kaiser Aluminum, you can compare the effects of market volatilities on Lerøy Seafood 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 Lerøy Seafood with a short position of Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lerøy Seafood and Kaiser Aluminum.
Diversification Opportunities for Lerøy Seafood and Kaiser Aluminum
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lerøy and Kaiser is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lery Seafood Group and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum and Lerøy Seafood 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 Lery Seafood Group 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 Lerøy Seafood i.e., Lerøy Seafood and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between Lerøy Seafood and Kaiser Aluminum
Assuming the 90 days horizon Lery Seafood Group is expected to generate 0.83 times more return on investment than Kaiser Aluminum. However, Lery Seafood Group is 1.2 times less risky than Kaiser Aluminum. It trades about 0.02 of its potential returns per unit of risk. Kaiser Aluminum is currently generating about -0.16 per unit of risk. If you would invest 431.00 in Lery Seafood Group on September 13, 2024 and sell it today you would earn a total of 3.00 from holding Lery Seafood Group or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lery Seafood Group vs. Kaiser Aluminum
Performance |
| Timeline |
| Lery Seafood Group |
| Kaiser Aluminum |
Lerøy Seafood and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lerøy Seafood and Kaiser Aluminum
The main advantage of trading using opposite Lerøy Seafood and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lerøy Seafood 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.| Lerøy Seafood vs. Hormel Foods | Lerøy Seafood vs. Superior Plus Corp | Lerøy Seafood vs. SIVERS SEMICONDUCTORS AB | Lerøy Seafood vs. NorAm Drilling AS |
| Kaiser Aluminum vs. Norsk Hydro ASA | Kaiser Aluminum vs. Aluminum of | Kaiser Aluminum vs. Superior Plus Corp | Kaiser Aluminum vs. SIVERS SEMICONDUCTORS AB |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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