Correlation Between Cooper Stnd and Target Hospitality

Can any of the company-specific risk be diversified away by investing in both Cooper Stnd and Target Hospitality 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 Cooper Stnd and Target Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cooper Stnd and Target Hospitality Corp, you can compare the effects of market volatilities on Cooper Stnd and Target Hospitality 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 Cooper Stnd with a short position of Target Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cooper Stnd and Target Hospitality.

Diversification Opportunities for Cooper Stnd and Target Hospitality

0.75

Correlation Coefficient

Cooper Stnd  Target Hospitality

Poor diversification

The 3 months correlation between Cooper and Target is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Cooper Stnd and Target Hospitality Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Hospitality Corp and Cooper Stnd 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 Cooper Stnd are associated (or correlated) with Target Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Hospitality Corp has no effect on the direction of Cooper Stnd i.e., Cooper Stnd and Target Hospitality go up and down completely randomly.

Pair Corralation between Cooper Stnd and Target Hospitality

Considering the 90-day investment horizon Cooper Stnd is expected to generate 2.67 times more return on investment than Target Hospitality. However, Cooper Stnd is 2.67 times more volatile than Target Hospitality Corp. It trades about 0.2 of its potential returns per unit of risk. Target Hospitality Corp is currently generating about 0.07 per unit of risk. If you would invest  2,111  in Cooper Stnd on April 6, 2025 and sell it today you would earn a total of  295.00  from holding Cooper Stnd or generate 13.97% return on investment over 90 days.

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

Cooper Stnd  vs.  Target Hospitality Corp

Cooper Stnd

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cooper Stnd are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cooper Stnd unveiled solid returns over the last few months and may actually be approaching a breakup point.

Target Hospitality Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Target Hospitality Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical indicators, Target Hospitality demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cooper Stnd and Target Hospitality

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

The idea behind Cooper Stnd and Target Hospitality Corp 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.