Correlation Between Koppers Holdings and Alto Ingredients
Can any of the company-specific risk be diversified away by investing in both Koppers Holdings and Alto Ingredients 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 Alto Ingredients into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koppers Holdings and Alto Ingredients, you can compare the effects of market volatilities on Koppers Holdings and Alto Ingredients 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 Alto Ingredients. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koppers Holdings and Alto Ingredients.
Diversification Opportunities for Koppers Holdings and Alto Ingredients
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Koppers and Alto is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Koppers Holdings and Alto Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alto Ingredients 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 Alto Ingredients. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alto Ingredients has no effect on the direction of Koppers Holdings i.e., Koppers Holdings and Alto Ingredients go up and down completely randomly.
Pair Corralation between Koppers Holdings and Alto Ingredients
Considering the 90-day investment horizon Koppers Holdings is expected to under-perform the Alto Ingredients. But the stock apears to be less risky and, when comparing its historical volatility, Koppers Holdings is 2.53 times less risky than Alto Ingredients. The stock trades about -0.06 of its potential returns per unit of risk. The Alto Ingredients is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 190.00 in Alto Ingredients on November 1, 2024 and sell it today you would lose (22.50) from holding Alto Ingredients or give up 11.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koppers Holdings vs. Alto Ingredients
Performance |
| Timeline |
| Koppers Holdings |
| Alto Ingredients |
Koppers Holdings and Alto Ingredients Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koppers Holdings and Alto Ingredients
The main advantage of trading using opposite Koppers Holdings and Alto Ingredients positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koppers Holdings position performs unexpectedly, Alto Ingredients 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 Alto Ingredients will offset losses from the drop in Alto Ingredients' long position.| Koppers Holdings vs. H B Fuller | Koppers Holdings vs. Minerals Technologies | Koppers Holdings vs. Quaker Chemical | Koppers Holdings vs. Oil Dri |
| Alto Ingredients vs. Oil Dri | Alto Ingredients vs. FutureFuel Corp | Alto Ingredients vs. Quaker Chemical | Alto Ingredients vs. Koppers Holdings |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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