Correlation Between Lion One and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and Kaiser Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Kaiser Aluminum, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Kaiser Aluminum.
Diversification Opportunities for Lion One and Kaiser Aluminum
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lion and Kaiser is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum and Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between Lion One and Kaiser Aluminum
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Kaiser Aluminum. In addition to that, Lion One is 1.18 times more volatile than Kaiser Aluminum. It trades about -0.13 of its total potential returns per unit of risk. Kaiser Aluminum is currently generating about 0.01 per unit of volatility. If you would invest 6,982 in Kaiser Aluminum on September 23, 2024 and sell it today you would lose (4.00) from holding Kaiser Aluminum or give up 0.06% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lion One Metals vs. Kaiser Aluminum
Performance |
Timeline |
Lion One Metals |
Kaiser Aluminum |
Lion One and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lion One and Kaiser Aluminum
The main advantage of trading using opposite Lion One and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.Lion One vs. Puma Exploration | Lion One vs. Sixty North Gold | Lion One vs. Red Pine Exploration | Lion One vs. Grande Portage Resources |
Kaiser Aluminum vs. Wheaton Precious Metals | Kaiser Aluminum vs. Royal Gold | Kaiser Aluminum vs. Agnico Eagle Mines | Kaiser Aluminum vs. Sandstorm Gold Ltd |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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