Correlation Between Kosmos Energy and Koppers Holdings
Can any of the company-specific risk be diversified away by investing in both Kosmos Energy and Koppers Holdings 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 Kosmos Energy and Koppers Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kosmos Energy and Koppers Holdings, you can compare the effects of market volatilities on Kosmos Energy and Koppers Holdings 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 Kosmos Energy with a short position of Koppers Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosmos Energy and Koppers Holdings.
Diversification Opportunities for Kosmos Energy and Koppers Holdings
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kosmos and Koppers is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Kosmos Energy and Koppers Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koppers Holdings and Kosmos Energy 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 Kosmos Energy are associated (or correlated) with Koppers Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koppers Holdings has no effect on the direction of Kosmos Energy i.e., Kosmos Energy and Koppers Holdings go up and down completely randomly.
Pair Corralation between Kosmos Energy and Koppers Holdings
Considering the 90-day investment horizon Kosmos Energy is expected to under-perform the Koppers Holdings. In addition to that, Kosmos Energy is 1.31 times more volatile than Koppers Holdings. It trades about -0.01 of its total potential returns per unit of risk. Koppers Holdings is currently generating about 0.03 per unit of volatility. If you would invest 2,997 in Koppers Holdings on August 24, 2024 and sell it today you would earn a total of 827.00 from holding Koppers Holdings or generate 27.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kosmos Energy vs. Koppers Holdings
Performance |
| Timeline |
| Kosmos Energy |
| Koppers Holdings |
Kosmos Energy and Koppers Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kosmos Energy and Koppers Holdings
The main advantage of trading using opposite Kosmos Energy and Koppers Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosmos Energy position performs unexpectedly, Koppers Holdings 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 Koppers Holdings will offset losses from the drop in Koppers Holdings' long position.| Kosmos Energy vs. Matador Resources | Kosmos Energy vs. Murphy Oil | Kosmos Energy vs. Civitas Resources | Kosmos Energy vs. Magnolia Oil Gas |
| Koppers Holdings vs. H B Fuller | Koppers Holdings vs. Minerals Technologies | Koppers Holdings vs. Quaker Chemical | Koppers Holdings vs. Oil Dri |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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