Correlation Between TOR Minerals and Koppers Holdings

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

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

Diversification Opportunities for TOR Minerals and Koppers Holdings

0.2

Correlation Coefficient

TOR Minerals  Koppers Holdings

Modest diversification

The 3 months correlation between TOR and Koppers is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding TOR Minerals International and Koppers Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koppers Holdings and TOR Minerals 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 TOR Minerals International 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 TOR Minerals i.e., TOR Minerals and Koppers Holdings go up and down completely randomly.

Pair Corralation between TOR Minerals and Koppers Holdings

Given the investment horizon of 90 days TOR Minerals International is expected to generate 1.31 times more return on investment than Koppers Holdings. However, TOR Minerals is 1.31 times more volatile than Koppers Holdings. It trades about 0.2 of its potential returns per unit of risk. Koppers Holdings is currently generating about 0.03 per unit of risk. 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

TOR Minerals International  vs.  Koppers Holdings

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.

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.

Pair Trading with TOR Minerals and Koppers Holdings

The main advantage of trading using opposite TOR Minerals and Koppers Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOR Minerals 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.

The idea behind TOR Minerals International and Koppers Holdings 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..