Correlation Between PT Bank and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both PT Bank 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 PT Bank and Kaiser Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank CIMB and Kaiser Aluminum, you can compare the effects of market volatilities on PT Bank 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 PT Bank with a short position of Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Kaiser Aluminum.
Diversification Opportunities for PT Bank and Kaiser Aluminum
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NKX and Kaiser is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank CIMB and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum and PT Bank 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 PT Bank CIMB 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 PT Bank i.e., PT Bank and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between PT Bank and Kaiser Aluminum
Assuming the 90 days trading horizon PT Bank is expected to generate 28.3 times less return on investment than Kaiser Aluminum. But when comparing it to its historical volatility, PT Bank CIMB is 7.63 times less risky than Kaiser Aluminum. It trades about 0.05 of its potential returns per unit of risk. Kaiser Aluminum is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 6,539 in Kaiser Aluminum on September 8, 2025 and sell it today you would earn a total of 2,561 from holding Kaiser Aluminum or generate 39.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank CIMB vs. Kaiser Aluminum
Performance |
| Timeline |
| PT Bank CIMB |
| Kaiser Aluminum |
PT Bank and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Kaiser Aluminum
The main advantage of trading using opposite PT Bank and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank 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.| PT Bank vs. BNP Paribas SA | PT Bank vs. DNB BANK ASA | PT Bank vs. Deutsche Bank Aktiengesellschaft | PT Bank vs. Socit Gnrale Socit |
| Kaiser Aluminum vs. Scottish Mortgage Investment | Kaiser Aluminum vs. EAT WELL INVESTMENT | Kaiser Aluminum vs. 5TH PLANET GAMES | Kaiser Aluminum vs. GAMING FAC SA |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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