Correlation Between Koppers Holdings and Sociedad Quimica
Can any of the company-specific risk be diversified away by investing in both Koppers Holdings and Sociedad Quimica 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 Sociedad Quimica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koppers Holdings and Sociedad Quimica y, you can compare the effects of market volatilities on Koppers Holdings and Sociedad Quimica 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 Sociedad Quimica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koppers Holdings and Sociedad Quimica.
Diversification Opportunities for Koppers Holdings and Sociedad Quimica
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Koppers and Sociedad is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Koppers Holdings and Sociedad Quimica y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sociedad Quimica y 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 Sociedad Quimica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sociedad Quimica y has no effect on the direction of Koppers Holdings i.e., Koppers Holdings and Sociedad Quimica go up and down completely randomly.
Pair Corralation between Koppers Holdings and Sociedad Quimica
Considering the 90-day investment horizon Koppers Holdings is expected to generate 2.79 times less return on investment than Sociedad Quimica. But when comparing it to its historical volatility, Koppers Holdings is 1.29 times less risky than Sociedad Quimica. It trades about 0.02 of its potential returns per unit of risk. Sociedad Quimica y is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,720 in Sociedad Quimica y on August 28, 2024 and sell it today you would earn a total of 164.00 from holding Sociedad Quimica y or generate 4.41% 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. Sociedad Quimica y
Performance |
| Timeline |
| Koppers Holdings |
| Sociedad Quimica y |
Koppers Holdings and Sociedad Quimica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koppers Holdings and Sociedad Quimica
The main advantage of trading using opposite Koppers Holdings and Sociedad Quimica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koppers Holdings position performs unexpectedly, Sociedad Quimica 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 Sociedad Quimica will offset losses from the drop in Sociedad Quimica's long position.| Koppers Holdings vs. H B Fuller | Koppers Holdings vs. Minerals Technologies | Koppers Holdings vs. Quaker Chemical | Koppers Holdings vs. Oil Dri |
| Sociedad Quimica vs. Linde plc Ordinary | Sociedad Quimica vs. Air Products and | Sociedad Quimica vs. Sherwin Williams Co | Sociedad Quimica vs. Albemarle Corp |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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