Correlation Between SES SA and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both SES SA 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 SES SA and Kaiser Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SES SA and Kaiser Aluminum, you can compare the effects of market volatilities on SES SA 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 SES SA with a short position of Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of SES SA and Kaiser Aluminum.
Diversification Opportunities for SES SA and Kaiser Aluminum
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SES and Kaiser is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding SES SA and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum and SES SA 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 SES SA 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 SES SA i.e., SES SA and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between SES SA and Kaiser Aluminum
Assuming the 90 days horizon SES SA is expected to under-perform the Kaiser Aluminum. But the stock apears to be less risky and, when comparing its historical volatility, SES SA is 1.59 times less risky than Kaiser Aluminum. The stock trades about -0.31 of its potential returns per unit of risk. The Kaiser Aluminum is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 6,124 in Kaiser Aluminum on September 15, 2024 and sell it today you would earn a total of 1,026 from holding Kaiser Aluminum or generate 16.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
SES SA vs. Kaiser Aluminum
Performance |
Timeline |
SES SA |
Kaiser Aluminum |
SES SA and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SES SA and Kaiser Aluminum
The main advantage of trading using opposite SES SA and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SES SA 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.SES SA vs. Kaiser Aluminum | SES SA vs. Boyd Gaming | SES SA vs. Hochschild Mining plc | SES SA vs. EAST SIDE GAMES |
Kaiser Aluminum vs. Norsk Hydro ASA | Kaiser Aluminum vs. Aluminum of | Kaiser Aluminum vs. Superior Plus Corp | Kaiser Aluminum vs. SIVERS SEMICONDUCTORS AB |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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