Correlation Between Hawkins and Koppers Holdings
Can any of the company-specific risk be diversified away by investing in both Hawkins 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 Hawkins and Koppers Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawkins and Koppers Holdings, you can compare the effects of market volatilities on Hawkins 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 Hawkins with a short position of Koppers Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawkins and Koppers Holdings.
Diversification Opportunities for Hawkins and Koppers Holdings
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hawkins and Koppers is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hawkins and Koppers Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koppers Holdings and Hawkins 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 Hawkins 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 Hawkins i.e., Hawkins and Koppers Holdings go up and down completely randomly.
Pair Corralation between Hawkins and Koppers Holdings
Given the investment horizon of 90 days Hawkins is expected to generate 1.26 times more return on investment than Koppers Holdings. However, Hawkins is 1.26 times more volatile than Koppers Holdings. It trades about 0.13 of its potential returns per unit of risk. Koppers Holdings is currently generating about -0.04 per unit of risk. If you would invest 8,794 in Hawkins on September 1, 2024 and sell it today you would earn a total of 4,657 from holding Hawkins or generate 52.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawkins vs. Koppers Holdings
Performance |
| Timeline |
| Hawkins |
| Koppers Holdings |
Hawkins and Koppers Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawkins and Koppers Holdings
The main advantage of trading using opposite Hawkins and Koppers Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawkins 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.| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
| 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |