Correlation Between BJs Restaurants and Copa Holdings
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Copa 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 BJs Restaurants and Copa Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Copa Holdings SA, you can compare the effects of market volatilities on BJs Restaurants and Copa 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 BJs Restaurants with a short position of Copa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Copa Holdings.
Diversification Opportunities for BJs Restaurants and Copa Holdings
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between BJs and Copa is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Copa Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copa Holdings SA and BJs Restaurants 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 BJs Restaurants are associated (or correlated) with Copa Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copa Holdings SA has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Copa Holdings go up and down completely randomly.
Pair Corralation between BJs Restaurants and Copa Holdings
Given the investment horizon of 90 days BJs Restaurants is expected to under-perform the Copa Holdings. But the stock apears to be less risky and, when comparing its historical volatility, BJs Restaurants is 1.04 times less risky than Copa Holdings. The stock trades about -0.05 of its potential returns per unit of risk. The Copa Holdings SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 8,837 in Copa Holdings SA on October 23, 2024 and sell it today you would earn a total of 194.00 from holding Copa Holdings SA or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. Copa Holdings SA
Performance |
| Timeline |
| BJs Restaurants |
| Copa Holdings SA |
BJs Restaurants and Copa Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Copa Holdings
The main advantage of trading using opposite BJs Restaurants and Copa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Copa 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 Copa Holdings will offset losses from the drop in Copa Holdings' long position.| BJs Restaurants vs. Dine Brands Global | BJs Restaurants vs. Brinker International | BJs Restaurants vs. Bloomin Brands | BJs Restaurants vs. The Cheesecake Factory |
| Copa Holdings vs. SkyWest | Copa Holdings vs. Sun Country Airlines | Copa Holdings vs. Air Transport Services | Copa Holdings vs. Frontier Group Holdings |
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.
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