Correlation Between Koppers Holdings and Oil Dri
Can any of the company-specific risk be diversified away by investing in both Koppers Holdings and Oil Dri 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 Oil Dri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koppers Holdings and Oil Dri, you can compare the effects of market volatilities on Koppers Holdings and Oil Dri 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 Oil Dri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koppers Holdings and Oil Dri.
Diversification Opportunities for Koppers Holdings and Oil Dri
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Koppers and Oil is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Koppers Holdings and Oil Dri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oil Dri 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 Oil Dri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oil Dri has no effect on the direction of Koppers Holdings i.e., Koppers Holdings and Oil Dri go up and down completely randomly.
Pair Corralation between Koppers Holdings and Oil Dri
Considering the 90-day investment horizon Koppers Holdings is expected to generate 2.24 times less return on investment than Oil Dri. But when comparing it to its historical volatility, Koppers Holdings is 1.02 times less risky than Oil Dri. It trades about 0.03 of its potential returns per unit of risk. Oil Dri is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,343 in Oil Dri on August 28, 2024 and sell it today you would earn a total of 3,637 from holding Oil Dri or generate 108.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koppers Holdings vs. Oil Dri
Performance |
| Timeline |
| Koppers Holdings |
| Oil Dri |
Koppers Holdings and Oil Dri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koppers Holdings and Oil Dri
The main advantage of trading using opposite Koppers Holdings and Oil Dri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koppers Holdings position performs unexpectedly, Oil Dri 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 Oil Dri will offset losses from the drop in Oil Dri's long position.| Koppers Holdings vs. H B Fuller | Koppers Holdings vs. Minerals Technologies | Koppers Holdings vs. Quaker Chemical | Koppers Holdings vs. Oil Dri |
| Oil Dri vs. H B Fuller | Oil Dri vs. Minerals Technologies | Oil Dri vs. Quaker Chemical | Oil Dri vs. Sensient Technologies |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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