Correlation Between Copa Holdings and Bon Natural
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Bon Natural 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 Bon Natural 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 Bon Natural Life, you can compare the effects of market volatilities on Copa Holdings and Bon Natural 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 Bon Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Bon Natural.
Diversification Opportunities for Copa Holdings and Bon Natural
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Copa and Bon is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Bon Natural Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bon Natural Life 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 Bon Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bon Natural Life has no effect on the direction of Copa Holdings i.e., Copa Holdings and Bon Natural go up and down completely randomly.
Pair Corralation between Copa Holdings and Bon Natural
Considering the 90-day investment horizon Copa Holdings SA is expected to generate 0.07 times more return on investment than Bon Natural. However, Copa Holdings SA is 15.03 times less risky than Bon Natural. It trades about -0.26 of its potential returns per unit of risk. Bon Natural Life is currently generating about -0.34 per unit of risk. If you would invest 9,244 in Copa Holdings SA on January 8, 2025 and sell it today you would lose (932.00) from holding Copa Holdings SA or give up 10.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copa Holdings SA vs. Bon Natural Life
Performance |
| Timeline |
| Copa Holdings SA |
| Bon Natural Life |
Copa Holdings and Bon Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Bon Natural
The main advantage of trading using opposite Copa Holdings and Bon Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Bon Natural 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 Bon Natural will offset losses from the drop in Bon Natural'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 |
| Bon Natural vs. Grand Havana | Bon Natural vs. Central Garden Pet | Bon Natural vs. Natures Sunshine Products | Bon Natural vs. Central Garden Pet |
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 CEOs Directory module to screen CEOs from public companies around the world.
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