Correlation Between Koppers Holdings and Boeing
Can any of the company-specific risk be diversified away by investing in both Koppers Holdings and Boeing 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 Boeing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koppers Holdings and The Boeing, you can compare the effects of market volatilities on Koppers Holdings and Boeing 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 Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koppers Holdings and Boeing.
Diversification Opportunities for Koppers Holdings and Boeing
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Koppers and Boeing is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Koppers Holdings and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing 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 Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing has no effect on the direction of Koppers Holdings i.e., Koppers Holdings and Boeing go up and down completely randomly.
Pair Corralation between Koppers Holdings and Boeing
Considering the 90-day investment horizon Koppers Holdings is expected to generate 1.43 times more return on investment than Boeing. However, Koppers Holdings is 1.43 times more volatile than The Boeing. It trades about 0.16 of its potential returns per unit of risk. The Boeing is currently generating about -0.12 per unit of risk. If you would invest 3,477 in Koppers Holdings on August 24, 2024 and sell it today you would earn a total of 382.00 from holding Koppers Holdings or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koppers Holdings vs. The Boeing
Performance |
| Timeline |
| Koppers Holdings |
| Boeing |
Koppers Holdings and Boeing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koppers Holdings and Boeing
The main advantage of trading using opposite Koppers Holdings and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koppers Holdings position performs unexpectedly, Boeing 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 Boeing will offset losses from the drop in Boeing's long position.| Koppers Holdings vs. H B Fuller | Koppers Holdings vs. Minerals Technologies | Koppers Holdings vs. Quaker Chemical | Koppers Holdings vs. Oil Dri |
| Boeing vs. Coca Cola Consolidated | Boeing vs. Koppers Holdings | Boeing vs. Coca Cola Femsa SAB | Boeing vs. Know Labs |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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