Correlation Between Copa Holdings and BEST
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and BEST 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 BEST 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 BEST Inc, you can compare the effects of market volatilities on Copa Holdings and BEST 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 BEST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and BEST.
Diversification Opportunities for Copa Holdings and BEST
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Copa and BEST is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and BEST Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEST Inc 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 BEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEST Inc has no effect on the direction of Copa Holdings i.e., Copa Holdings and BEST go up and down completely randomly.
Pair Corralation between Copa Holdings and BEST
Considering the 90-day investment horizon Copa Holdings SA is expected to under-perform the BEST. In addition to that, Copa Holdings is 10.42 times more volatile than BEST Inc. It trades about -0.1 of its total potential returns per unit of risk. BEST Inc is currently generating about -0.17 per unit of volatility. If you would invest 269.00 in BEST Inc on August 27, 2024 and sell it today you would lose (3.00) from holding BEST Inc or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copa Holdings SA vs. BEST Inc
Performance |
| Timeline |
| Copa Holdings SA |
| BEST Inc |
Copa Holdings and BEST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and BEST
The main advantage of trading using opposite Copa Holdings and BEST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, BEST 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 BEST will offset losses from the drop in BEST'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 |
| BEST vs. Heartland Express | BEST vs. Universal Logistics Holdings | BEST vs. Marten Transport | BEST vs. Werner Enterprises |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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