Correlation Between Flexible Solutions and Koppers Holdings
Can any of the company-specific risk be diversified away by investing in both Flexible Solutions 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 Flexible Solutions and Koppers Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexible Solutions International and Koppers Holdings, you can compare the effects of market volatilities on Flexible Solutions 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 Flexible Solutions with a short position of Koppers Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Solutions and Koppers Holdings.
Diversification Opportunities for Flexible Solutions and Koppers Holdings
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flexible and Koppers is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and Koppers Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koppers Holdings and Flexible Solutions 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 Flexible Solutions International 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 Flexible Solutions i.e., Flexible Solutions and Koppers Holdings go up and down completely randomly.
Pair Corralation between Flexible Solutions and Koppers Holdings
Considering the 90-day investment horizon Flexible Solutions International is expected to under-perform the Koppers Holdings. In addition to that, Flexible Solutions is 1.51 times more volatile than Koppers Holdings. It trades about -0.01 of its total potential returns per unit of risk. Koppers Holdings is currently generating about 0.16 per unit of volatility. If you would invest 3,481 in Koppers Holdings on August 27, 2024 and sell it today you would earn a total of 343.00 from holding Koppers Holdings or generate 9.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexible Solutions Internation vs. Koppers Holdings
Performance |
| Timeline |
| Flexible Solutions |
| Koppers Holdings |
Flexible Solutions and Koppers Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexible Solutions and Koppers Holdings
The main advantage of trading using opposite Flexible Solutions and Koppers Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Solutions 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.| Flexible Solutions vs. Oil Dri | Flexible Solutions vs. H B Fuller | Flexible Solutions vs. Northern Technologies | Flexible Solutions vs. Cabot |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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