Correlation Between Copa Holdings and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Canlan Ice 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 Canlan Ice 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 Canlan Ice Sports, you can compare the effects of market volatilities on Copa Holdings and Canlan Ice 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 Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Canlan Ice.
Diversification Opportunities for Copa Holdings and Canlan Ice
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Copa and Canlan is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Copa Holdings i.e., Copa Holdings and Canlan Ice go up and down completely randomly.
Pair Corralation between Copa Holdings and Canlan Ice
Considering the 90-day investment horizon Copa Holdings SA is expected to generate 18.3 times more return on investment than Canlan Ice. However, Copa Holdings is 18.3 times more volatile than Canlan Ice Sports. It trades about 0.03 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.13 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copa Holdings SA vs. Canlan Ice Sports
Performance |
| Timeline |
| Copa Holdings SA |
| Canlan Ice Sports |
Copa Holdings and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Canlan Ice
The main advantage of trading using opposite Copa Holdings and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice'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 |
| Canlan Ice vs. Kite Realty Group | Canlan Ice vs. Alaska Air Group | Canlan Ice vs. Stepstone Group | Canlan Ice vs. Tencent Music Entertainment |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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