Correlation Between Copa Holdings and Cross Country
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Cross Country 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 Cross Country 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 Cross Country Healthcare, you can compare the effects of market volatilities on Copa Holdings and Cross Country 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 Cross Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Cross Country.
Diversification Opportunities for Copa Holdings and Cross Country
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Copa and Cross is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Cross Country Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cross Country Healthcare 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 Cross Country. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cross Country Healthcare has no effect on the direction of Copa Holdings i.e., Copa Holdings and Cross Country go up and down completely randomly.
Pair Corralation between Copa Holdings and Cross Country
Assuming the 90 days horizon Copa Holdings SA is expected to generate 0.68 times more return on investment than Cross Country. However, Copa Holdings SA is 1.46 times less risky than Cross Country. It trades about 0.04 of its potential returns per unit of risk. Cross Country Healthcare is currently generating about -0.05 per unit of risk. If you would invest 6,913 in Copa Holdings SA on September 2, 2024 and sell it today you would earn a total of 2,037 from holding Copa Holdings SA or generate 29.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copa Holdings SA vs. Cross Country Healthcare
Performance |
| Timeline |
| Copa Holdings SA |
| Cross Country Healthcare |
Copa Holdings and Cross Country Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Cross Country
The main advantage of trading using opposite Copa Holdings and Cross Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Cross Country 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 Cross Country will offset losses from the drop in Cross Country's long position.| Copa Holdings vs. SBA Communications Corp | Copa Holdings vs. Casio Computer CoLtd | Copa Holdings vs. INTERSHOP Communications Aktiengesellschaft | Copa Holdings vs. Internet Thailand PCL |
| Cross Country vs. SMA Solar Technology | Cross Country vs. Align Technology | Cross Country vs. Micron Technology | Cross Country vs. Transportadora de Gas |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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