Correlation Between Koppers Holdings and Via Renewables
Can any of the company-specific risk be diversified away by investing in both Koppers Holdings and Via Renewables 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 Via Renewables into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koppers Holdings and Via Renewables, you can compare the effects of market volatilities on Koppers Holdings and Via Renewables 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 Via Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koppers Holdings and Via Renewables.
Diversification Opportunities for Koppers Holdings and Via Renewables
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Koppers and Via is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Koppers Holdings and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables 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 Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of Koppers Holdings i.e., Koppers Holdings and Via Renewables go up and down completely randomly.
Pair Corralation between Koppers Holdings and Via Renewables
Considering the 90-day investment horizon Koppers Holdings is expected to generate 1.12 times less return on investment than Via Renewables. But when comparing it to its historical volatility, Koppers Holdings is 1.32 times less risky than Via Renewables. It trades about 0.03 of its potential returns per unit of risk. Via Renewables is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,799 in Via Renewables on August 28, 2024 and sell it today you would earn a total of 413.00 from holding Via Renewables or generate 22.96% 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. Via Renewables
Performance |
| Timeline |
| Koppers Holdings |
| Via Renewables |
Koppers Holdings and Via Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koppers Holdings and Via Renewables
The main advantage of trading using opposite Koppers Holdings and Via Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koppers Holdings position performs unexpectedly, Via Renewables 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 Via Renewables will offset losses from the drop in Via Renewables' long position.| Koppers Holdings vs. H B Fuller | Koppers Holdings vs. Minerals Technologies | Koppers Holdings vs. Quaker Chemical | Koppers Holdings vs. Oil Dri |
| Via Renewables vs. CMS Energy | Via Renewables vs. ACRES Commercial Realty | Via Renewables vs. Atlanticus Holdings 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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