Correlation Between Copa Holdings and Air France
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Air France 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 Air France 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 Air France KLM, you can compare the effects of market volatilities on Copa Holdings and Air France 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 Air France. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Air France.
Diversification Opportunities for Copa Holdings and Air France
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Copa and Air is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Air France KLM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air France KLM 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 Air France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air France KLM has no effect on the direction of Copa Holdings i.e., Copa Holdings and Air France go up and down completely randomly.
Pair Corralation between Copa Holdings and Air France
Considering the 90-day investment horizon Copa Holdings SA is expected to generate 0.69 times more return on investment than Air France. However, Copa Holdings SA is 1.45 times less risky than Air France. It trades about 0.02 of its potential returns per unit of risk. Air France KLM is currently generating about -0.05 per unit of risk. If you would invest 8,647 in Copa Holdings SA on November 9, 2024 and sell it today you would earn a total of 467.00 from holding Copa Holdings SA or generate 5.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copa Holdings SA vs. Air France KLM
Performance |
| Timeline |
| Copa Holdings SA |
| Air France KLM |
Copa Holdings and Air France Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Air France
The main advantage of trading using opposite Copa Holdings and Air France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Air France 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 Air France will offset losses from the drop in Air France's long position.| Copa Holdings vs. SkyWest | Copa Holdings vs. Sun Country Airlines | Copa Holdings vs. Air Transport Services | Copa Holdings vs. Frontier Group Holdings |
| Air France vs. International Consolidated Airlines | Air France vs. Air France KLM SA | Air France vs. Finnair Oyj | Air France vs. AirAsia Group Berhad |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |