Correlation Between Kaiser Aluminum and Constellium
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Constellium 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 Constellium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Constellium Nv, you can compare the effects of market volatilities on Kaiser Aluminum and Constellium 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 Constellium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Constellium.
Diversification Opportunities for Kaiser Aluminum and Constellium
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kaiser and Constellium is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Constellium Nv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellium Nv 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 Constellium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellium Nv has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Constellium go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Constellium
Given the investment horizon of 90 days Kaiser Aluminum is expected to generate 1.6 times less return on investment than Constellium. In addition to that, Kaiser Aluminum is 1.05 times more volatile than Constellium Nv. It trades about 0.03 of its total potential returns per unit of risk. Constellium Nv is currently generating about 0.05 per unit of volatility. If you would invest 1,275 in Constellium Nv on January 26, 2024 and sell it today you would earn a total of 724.00 from holding Constellium Nv or generate 56.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaiser Aluminum vs. Constellium Nv
Performance |
| Timeline |
| Kaiser Aluminum |
| Constellium Nv |
Kaiser Aluminum and Constellium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and Constellium
The main advantage of trading using opposite Kaiser Aluminum and Constellium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Constellium 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 Constellium will offset losses from the drop in Constellium's long position.| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
| Constellium vs. Century Aluminum | Constellium vs. Alcoa Corp | Constellium vs. China Hongqiao Group | Constellium vs. Alumina Limited PK |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |