Correlation Between Copa Holdings and Aspen Digital
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Aspen Digital 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 Aspen Digital 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 Aspen Digital, you can compare the effects of market volatilities on Copa Holdings and Aspen Digital 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 Aspen Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Aspen Digital.
Diversification Opportunities for Copa Holdings and Aspen Digital
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Copa and Aspen is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Aspen Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Digital 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 Aspen Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Digital has no effect on the direction of Copa Holdings i.e., Copa Holdings and Aspen Digital go up and down completely randomly.
Pair Corralation between Copa Holdings and Aspen Digital
Considering the 90-day investment horizon Copa Holdings SA is expected to under-perform the Aspen Digital. In addition to that, Copa Holdings is 7.19 times more volatile than Aspen Digital. It trades about -0.09 of its total potential returns per unit of risk. Aspen Digital is currently generating about 0.06 per unit of volatility. If you would invest 335.00 in Aspen Digital on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Aspen Digital or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copa Holdings SA vs. Aspen Digital
Performance |
| Timeline |
| Copa Holdings SA |
| Aspen Digital |
Copa Holdings and Aspen Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Aspen Digital
The main advantage of trading using opposite Copa Holdings and Aspen Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Aspen Digital 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 Aspen Digital will offset losses from the drop in Aspen Digital'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 |
| Aspen Digital vs. Copa Holdings SA | Aspen Digital vs. United Airlines Holdings | Aspen Digital vs. Delta Air Lines | Aspen Digital vs. SkyWest |
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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