Correlation Between Copa Holdings and BBAI WT
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and BBAI WT 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 BBAI WT 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 BBAI WT, you can compare the effects of market volatilities on Copa Holdings and BBAI WT 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 BBAI WT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and BBAI WT.
Diversification Opportunities for Copa Holdings and BBAI WT
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Copa and BBAI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and BBAI WT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBAI WT 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 BBAI WT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBAI WT has no effect on the direction of Copa Holdings i.e., Copa Holdings and BBAI WT go up and down completely randomly.
Pair Corralation between Copa Holdings and BBAI WT
Considering the 90-day investment horizon Copa Holdings SA is expected to generate 0.16 times more return on investment than BBAI WT. However, Copa Holdings SA is 6.42 times less risky than BBAI WT. It trades about 0.01 of its potential returns per unit of risk. BBAI WT is currently generating about -0.71 per unit of risk. If you would invest 8,957 in Copa Holdings SA on September 12, 2024 and sell it today you would earn a total of 13.50 from holding Copa Holdings SA or generate 0.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.6% |
| Values | Daily Returns |
Copa Holdings SA vs. BBAI WT
Performance |
| Timeline |
| Copa Holdings SA |
| BBAI WT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Copa Holdings and BBAI WT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and BBAI WT
The main advantage of trading using opposite Copa Holdings and BBAI WT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, BBAI WT 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 BBAI WT will offset losses from the drop in BBAI WT's long position.| Copa Holdings vs. Volaris | Copa Holdings vs. flyExclusive, | Copa Holdings vs. Alaska Air Group | Copa Holdings vs. LATAM Airlines Group |
| BBAI WT vs. Copa Holdings SA | BBAI WT vs. United Airlines Holdings | BBAI WT vs. Delta Air Lines | BBAI WT 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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