Correlation Between Koppers Holdings and Danimer Scientific

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

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

Diversification Opportunities for Koppers Holdings and Danimer Scientific

0.0

Correlation Coefficient

Koppers Holdings  Danimer Scientific

Pay attention - limited upside

The 3 months correlation between Koppers and Danimer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Koppers Holdings and Danimer Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danimer Scientific 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 Danimer Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danimer Scientific has no effect on the direction of Koppers Holdings i.e., Koppers Holdings and Danimer Scientific go up and down completely randomly.

Pair Corralation between Koppers Holdings and Danimer Scientific

If you would invest (100.00) in Danimer Scientific on December 20, 2024 and sell it today you would earn a total of  100.00  from holding Danimer Scientific or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Koppers Holdings  vs.  Danimer Scientific

Koppers Holdings

Risk-Adjusted Performance

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 relatively invariable basic indicators, Koppers Holdings is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Danimer Scientific

Risk-Adjusted Performance

Very Weak

Over the last 90 days Danimer Scientific has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Danimer Scientific is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Koppers Holdings and Danimer Scientific

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

The idea behind Koppers Holdings and Danimer Scientific 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .