Correlation Between Koppers Holdings and High-yield Municipal
Can any of the company-specific risk be diversified away by investing in both Koppers Holdings and High-yield Municipal 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 Koppers Holdings and High-yield Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koppers Holdings and High Yield Municipal Fund, you can compare the effects of market volatilities on Koppers Holdings and High-yield Municipal 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 Koppers Holdings with a short position of High-yield Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koppers Holdings and High-yield Municipal.
Diversification Opportunities for Koppers Holdings and High-yield Municipal
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Koppers and High-yield is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Koppers Holdings and High Yield Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Municipal and Koppers Holdings 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 Koppers Holdings are associated (or correlated) with High-yield Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Municipal has no effect on the direction of Koppers Holdings i.e., Koppers Holdings and High-yield Municipal go up and down completely randomly.
Pair Corralation between Koppers Holdings and High-yield Municipal
Considering the 90-day investment horizon Koppers Holdings is expected to generate 7.88 times more return on investment than High-yield Municipal. However, Koppers Holdings is 7.88 times more volatile than High Yield Municipal Fund. It trades about 0.03 of its potential returns per unit of risk. High Yield Municipal Fund is currently generating about 0.07 per unit of risk. If you would invest 2,997 in Koppers Holdings on August 24, 2024 and sell it today you would earn a total of 827.00 from holding Koppers Holdings or generate 27.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koppers Holdings vs. High Yield Municipal Fund
Performance |
| Timeline |
| Koppers Holdings |
| High Yield Municipal |
Koppers Holdings and High-yield Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koppers Holdings and High-yield Municipal
The main advantage of trading using opposite Koppers Holdings and High-yield Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koppers Holdings position performs unexpectedly, High-yield Municipal 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 High-yield Municipal will offset losses from the drop in High-yield Municipal's long position.| Koppers Holdings vs. H B Fuller | Koppers Holdings vs. Minerals Technologies | Koppers Holdings vs. Quaker Chemical | Koppers Holdings vs. Oil Dri |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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