Correlation Between Core Molding and Koppers Holdings
Can any of the company-specific risk be diversified away by investing in both Core Molding and Koppers Holdings 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 Core Molding and Koppers Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Molding Technologies and Koppers Holdings, you can compare the effects of market volatilities on Core Molding and Koppers Holdings 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 Core Molding with a short position of Koppers Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Molding and Koppers Holdings.
Diversification Opportunities for Core Molding and Koppers Holdings
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Core and Koppers is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Core Molding Technologies and Koppers Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koppers Holdings and Core Molding 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 Core Molding Technologies are associated (or correlated) with Koppers Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koppers Holdings has no effect on the direction of Core Molding i.e., Core Molding and Koppers Holdings go up and down completely randomly.
Pair Corralation between Core Molding and Koppers Holdings
Considering the 90-day investment horizon Core Molding is expected to generate 5.73 times less return on investment than Koppers Holdings. In addition to that, Core Molding is 1.44 times more volatile than Koppers Holdings. It trades about 0.0 of its total potential returns per unit of risk. Koppers Holdings is currently generating about 0.03 per unit of volatility. If you would invest 3,275 in Koppers Holdings on August 31, 2024 and sell it today you would earn a total of 571.00 from holding Koppers Holdings or generate 17.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Core Molding Technologies vs. Koppers Holdings
Performance |
| Timeline |
| Core Molding Technologies |
| Koppers Holdings |
Core Molding and Koppers Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Molding and Koppers Holdings
The main advantage of trading using opposite Core Molding and Koppers Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Molding position performs unexpectedly, Koppers Holdings 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 Koppers Holdings will offset losses from the drop in Koppers Holdings' long position.| Core Molding vs. Innospec | Core Molding vs. H B Fuller | Core Molding vs. Quaker Chemical | Core Molding vs. Minerals Technologies |
| Koppers Holdings vs. H B Fuller | Koppers Holdings vs. Minerals Technologies | Koppers Holdings vs. Quaker Chemical | Koppers Holdings vs. Oil Dri |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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