Correlation Between Perimeter Solutions and Koppers Holdings

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

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

Diversification Opportunities for Perimeter Solutions and Koppers Holdings

-0.16

Correlation Coefficient

Perimeter Solutions  Koppers Holdings

Good diversification

The 3 months correlation between Perimeter and Koppers is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Perimeter Solutions SA and Koppers Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koppers Holdings and Perimeter Solutions 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 Perimeter Solutions SA 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 Perimeter Solutions i.e., Perimeter Solutions and Koppers Holdings go up and down completely randomly.

Pair Corralation between Perimeter Solutions and Koppers Holdings

Considering the 90-day investment horizon Perimeter Solutions SA is expected to generate 1.07 times more return on investment than Koppers Holdings. However, Perimeter Solutions is 1.07 times more volatile than Koppers Holdings. It trades about 0.12 of its potential returns per unit of risk. Koppers Holdings is currently generating about -0.15 per unit of risk. If you would invest  1,216  in Perimeter Solutions SA on September 16, 2024 and sell it today you would earn a total of  66.00  from holding Perimeter Solutions SA or generate 5.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Perimeter Solutions SA  vs.  Koppers Holdings

Perimeter Solutions

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Perimeter Solutions SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Perimeter Solutions may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 unfluctuating 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 Perimeter Solutions and Koppers Holdings

The main advantage of trading using opposite Perimeter Solutions and Koppers Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perimeter Solutions 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 Perimeter Solutions SA 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.