Correlation Between Kaiser Aluminum and AngloGold Ashanti
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and AngloGold Ashanti 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 AngloGold Ashanti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and AngloGold Ashanti plc, you can compare the effects of market volatilities on Kaiser Aluminum and AngloGold Ashanti 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 AngloGold Ashanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and AngloGold Ashanti.
Diversification Opportunities for Kaiser Aluminum and AngloGold Ashanti
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kaiser and AngloGold is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and AngloGold Ashanti plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngloGold Ashanti plc 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 AngloGold Ashanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AngloGold Ashanti plc has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and AngloGold Ashanti go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and AngloGold Ashanti
Given the investment horizon of 90 days Kaiser Aluminum is expected to generate 0.9 times more return on investment than AngloGold Ashanti. However, Kaiser Aluminum is 1.11 times less risky than AngloGold Ashanti. It trades about 0.09 of its potential returns per unit of risk. AngloGold Ashanti plc is currently generating about 0.0 per unit of risk. If you would invest 5,546 in Kaiser Aluminum on January 20, 2024 and sell it today you would earn a total of 3,471 from holding Kaiser Aluminum or generate 62.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 99.6% |
Values | Daily Returns |
Kaiser Aluminum vs. AngloGold Ashanti plc
Performance |
Timeline |
Kaiser Aluminum |
AngloGold Ashanti plc |
Kaiser Aluminum and AngloGold Ashanti Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kaiser Aluminum and AngloGold Ashanti
The main advantage of trading using opposite Kaiser Aluminum and AngloGold Ashanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, AngloGold Ashanti 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 AngloGold Ashanti will offset losses from the drop in AngloGold Ashanti's long position.Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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