Correlation Between Kaiser Aluminum and Tsingtao Brewery
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Tsingtao Brewery 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 Tsingtao Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Tsingtao Brewery, you can compare the effects of market volatilities on Kaiser Aluminum and Tsingtao Brewery 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 Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Tsingtao Brewery.
Diversification Opportunities for Kaiser Aluminum and Tsingtao Brewery
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kaiser and Tsingtao is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Tsingtao Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery 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 Tsingtao Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsingtao Brewery has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Tsingtao Brewery
Assuming the 90 days trading horizon Kaiser Aluminum is expected to generate 1.98 times more return on investment than Tsingtao Brewery. However, Kaiser Aluminum is 1.98 times more volatile than Tsingtao Brewery. It trades about 0.16 of its potential returns per unit of risk. Tsingtao Brewery is currently generating about 0.09 per unit of risk. If you would invest 6,390 in Kaiser Aluminum on September 4, 2025 and sell it today you would earn a total of 2,010 from holding Kaiser Aluminum or generate 31.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaiser Aluminum vs. Tsingtao Brewery
Performance |
| Timeline |
| Kaiser Aluminum |
| Tsingtao Brewery |
Kaiser Aluminum and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and Tsingtao Brewery
The main advantage of trading using opposite Kaiser Aluminum and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Tsingtao Brewery 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 Tsingtao Brewery will offset losses from the drop in Tsingtao Brewery's long position.| Kaiser Aluminum vs. Aozora Bank | Kaiser Aluminum vs. PURETECH HEALTH PLC | Kaiser Aluminum vs. PT Bank CIMB | Kaiser Aluminum vs. Erste Group Bank |
| Tsingtao Brewery vs. CVS Health | Tsingtao Brewery vs. Zijin Mining Group | Tsingtao Brewery vs. ARDAGH METAL PACDL 0001 | Tsingtao Brewery vs. Kaiser Aluminum |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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