Correlation Between Koppers Holdings and TOR Minerals

Can any of the company-specific risk be diversified away by investing in both Koppers Holdings and TOR Minerals 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 TOR Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Koppers Holdings and TOR Minerals International, you can compare the effects of market volatilities on Koppers Holdings and TOR Minerals 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 TOR Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koppers Holdings and TOR Minerals.

Diversification Opportunities for Koppers Holdings and TOR Minerals

0.2

Correlation Coefficient

Koppers Holdings  TOR Minerals

Modest diversification

The 3 months correlation between Koppers and TOR is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Koppers Holdings and TOR Minerals International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOR Minerals Interna 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 TOR Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOR Minerals Interna has no effect on the direction of Koppers Holdings i.e., Koppers Holdings and TOR Minerals go up and down completely randomly.

Pair Corralation between Koppers Holdings and TOR Minerals

Considering the 90-day investment horizon Koppers Holdings is expected to generate 10.16 times less return on investment than TOR Minerals. But when comparing it to its historical volatility, Koppers Holdings is 1.31 times less risky than TOR Minerals. It trades about 0.03 of its potential returns per unit of risk. TOR Minerals International is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  227.00  in TOR Minerals International on September 14, 2024 and sell it today you would earn a total of  43.00  from holding TOR Minerals International or generate 18.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	6.28%
Values	Daily Returns

Koppers Holdings  vs.  TOR Minerals International

Koppers Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Koppers Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest conflicting performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

TOR Minerals Interna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TOR Minerals International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, TOR Minerals is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Koppers Holdings and TOR Minerals

The main advantage of trading using opposite Koppers Holdings and TOR Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koppers Holdings position performs unexpectedly, TOR Minerals 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 TOR Minerals will offset losses from the drop in TOR Minerals' long position.

The idea behind Koppers Holdings and TOR Minerals International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.