Correlation Between Koppers Holdings and Cohu
Can any of the company-specific risk be diversified away by investing in both Koppers Holdings and Cohu 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 Cohu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koppers Holdings and Cohu Inc, you can compare the effects of market volatilities on Koppers Holdings and Cohu 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 Cohu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koppers Holdings and Cohu.
Diversification Opportunities for Koppers Holdings and Cohu
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Koppers and Cohu is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Koppers Holdings and Cohu Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohu Inc 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 Cohu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohu Inc has no effect on the direction of Koppers Holdings i.e., Koppers Holdings and Cohu go up and down completely randomly.
Pair Corralation between Koppers Holdings and Cohu
Considering the 90-day investment horizon Koppers Holdings is expected to generate 0.98 times more return on investment than Cohu. However, Koppers Holdings is 1.02 times less risky than Cohu. It trades about 0.03 of its potential returns per unit of risk. Cohu Inc is currently generating about -0.03 per unit of risk. If you would invest 3,332 in Koppers Holdings on August 28, 2024 and sell it today you would earn a total of 570.00 from holding Koppers Holdings or generate 17.11% 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. Cohu Inc
Performance |
| Timeline |
| Koppers Holdings |
| Cohu Inc |
Koppers Holdings and Cohu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koppers Holdings and Cohu
The main advantage of trading using opposite Koppers Holdings and Cohu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koppers Holdings position performs unexpectedly, Cohu 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 Cohu will offset losses from the drop in Cohu's long position.| Koppers Holdings vs. Quaker Chemical | Koppers Holdings vs. Minerals Technologies | Koppers Holdings vs. Innospec | Koppers Holdings vs. H B Fuller |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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