Correlation Between COPLAND ROAD and Kaiser Aluminum

Can any of the company-specific risk be diversified away by investing in both COPLAND ROAD 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 COPLAND ROAD and Kaiser Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COPLAND ROAD CAPITAL and Kaiser Aluminum, you can compare the effects of market volatilities on COPLAND ROAD 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 COPLAND ROAD with a short position of Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of COPLAND ROAD and Kaiser Aluminum.

Diversification Opportunities for COPLAND ROAD and Kaiser Aluminum

-0.42

Correlation Coefficient

COPLAND ROAD  Kaiser Aluminum

Very good diversification

The 3 months correlation between COPLAND and Kaiser is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding COPLAND ROAD CAPITAL and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum and COPLAND ROAD 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 COPLAND ROAD CAPITAL 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 COPLAND ROAD i.e., COPLAND ROAD and Kaiser Aluminum go up and down completely randomly.

Pair Corralation between COPLAND ROAD and Kaiser Aluminum

Assuming the 90 days horizon COPLAND ROAD is expected to generate 10.1 times less return on investment than Kaiser Aluminum. But when comparing it to its historical volatility, COPLAND ROAD CAPITAL is 1.11 times less risky than Kaiser Aluminum. It trades about 0.01 of its potential returns per unit of risk. Kaiser Aluminum is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  6,223  in Kaiser Aluminum on September 25, 2024 and sell it today you would earn a total of  427.00  from holding Kaiser Aluminum or generate 6.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

COPLAND ROAD CAPITAL  vs.  Kaiser Aluminum

COPLAND ROAD CAPITAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COPLAND ROAD CAPITAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, COPLAND ROAD is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Kaiser Aluminum

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kaiser Aluminum are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Kaiser Aluminum may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with COPLAND ROAD and Kaiser Aluminum

The main advantage of trading using opposite COPLAND ROAD and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COPLAND ROAD 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.

The idea behind COPLAND ROAD CAPITAL and Kaiser Aluminum pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.