Correlation Between Copa Holdings and Kellogg
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Kellogg 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 Copa Holdings and Kellogg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Copa Holdings SA and Kellogg Company, you can compare the effects of market volatilities on Copa Holdings and Kellogg 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 Copa Holdings with a short position of Kellogg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Kellogg.
Diversification Opportunities for Copa Holdings and Kellogg
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Copa and Kellogg is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Kellogg Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellogg Company and Copa 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 Copa Holdings SA are associated (or correlated) with Kellogg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellogg Company has no effect on the direction of Copa Holdings i.e., Copa Holdings and Kellogg go up and down completely randomly.
Pair Corralation between Copa Holdings and Kellogg
Assuming the 90 days horizon Copa Holdings SA is expected to under-perform the Kellogg. In addition to that, Copa Holdings is 4.54 times more volatile than Kellogg Company. It trades about -0.04 of its total potential returns per unit of risk. Kellogg Company is currently generating about 0.2 per unit of volatility. If you would invest 7,420 in Kellogg Company on August 29, 2024 and sell it today you would earn a total of 244.00 from holding Kellogg Company or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copa Holdings SA vs. Kellogg Company
Performance |
| Timeline |
| Copa Holdings SA |
| Kellogg Company |
Copa Holdings and Kellogg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Kellogg
The main advantage of trading using opposite Copa Holdings and Kellogg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Kellogg 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 Kellogg will offset losses from the drop in Kellogg's long position.| Copa Holdings vs. Broadcom | Copa Holdings vs. Selective Insurance Group | Copa Holdings vs. Transport International Holdings | Copa Holdings vs. LIFENET INSURANCE CO |
| Kellogg vs. COLUMBIA SPORTSWEAR | Kellogg vs. LION ONE METALS | Kellogg vs. Playa Hotels Resorts | Kellogg vs. Western Copper and |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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