Correlation Between Kaiser Aluminum and Sims Metal
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Sims Metal 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 Sims Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Sims Metal Management, you can compare the effects of market volatilities on Kaiser Aluminum and Sims Metal 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 Sims Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Sims Metal.
Diversification Opportunities for Kaiser Aluminum and Sims Metal
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kaiser and Sims is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Sims Metal Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sims Metal Management 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 Sims Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sims Metal Management has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Sims Metal go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Sims Metal
If you would invest 8,406 in Kaiser Aluminum on January 25, 2024 and sell it today you would earn a total of 346.00 from holding Kaiser Aluminum or generate 4.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 4.55% |
Values | Daily Returns |
Kaiser Aluminum vs. Sims Metal Management
Performance |
Timeline |
Kaiser Aluminum |
Sims Metal Management |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kaiser Aluminum and Sims Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kaiser Aluminum and Sims Metal
The main advantage of trading using opposite Kaiser Aluminum and Sims Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Sims Metal 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 Sims Metal will offset losses from the drop in Sims Metal's long position.Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
Sims Metal vs. Steel Dynamics | Sims Metal vs. Cleveland Cliffs | Sims Metal vs. United States Steel | Sims Metal vs. ArcelorMittal SA ADR |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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