Correlation Between Copa Holdings and Brunswick
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Brunswick 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 Brunswick 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 Brunswick, you can compare the effects of market volatilities on Copa Holdings and Brunswick 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 Brunswick. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Brunswick.
Diversification Opportunities for Copa Holdings and Brunswick
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Copa and Brunswick is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Brunswick in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick 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 Brunswick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunswick has no effect on the direction of Copa Holdings i.e., Copa Holdings and Brunswick go up and down completely randomly.
Pair Corralation between Copa Holdings and Brunswick
Considering the 90-day investment horizon Copa Holdings SA is expected to generate 0.92 times more return on investment than Brunswick. However, Copa Holdings SA is 1.09 times less risky than Brunswick. It trades about 0.03 of its potential returns per unit of risk. Brunswick is currently generating about 0.02 per unit of risk. If you would invest 7,639 in Copa Holdings SA on September 2, 2024 and sell it today you would earn a total of 1,698 from holding Copa Holdings SA or generate 22.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copa Holdings SA vs. Brunswick
Performance |
| Timeline |
| Copa Holdings SA |
| Brunswick |
Copa Holdings and Brunswick Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Brunswick
The main advantage of trading using opposite Copa Holdings and Brunswick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Brunswick 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 Brunswick will offset losses from the drop in Brunswick's long position.| Copa Holdings vs. Canadian Pacific Railway | Copa Holdings vs. Werner Enterprises | Copa Holdings vs. Canadian National Railway | Copa Holdings vs. CSX Corporation |
| Brunswick vs. MCBC Holdings | Brunswick vs. Marine Products | Brunswick vs. Winnebago Industries | Brunswick vs. LCI Industries |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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