Correlation Between Copa Holdings and Dr Ing
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Dr Ing 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 Dr Ing 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 Dr Ing hc, you can compare the effects of market volatilities on Copa Holdings and Dr Ing 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 Dr Ing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Dr Ing.
Diversification Opportunities for Copa Holdings and Dr Ing
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Copa and DRPRY is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Dr Ing hc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dr Ing hc 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 Dr Ing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dr Ing hc has no effect on the direction of Copa Holdings i.e., Copa Holdings and Dr Ing go up and down completely randomly.
Pair Corralation between Copa Holdings and Dr Ing
Considering the 90-day investment horizon Copa Holdings SA is expected to generate 1.04 times more return on investment than Dr Ing. However, Copa Holdings is 1.04 times more volatile than Dr Ing hc. It trades about 0.04 of its potential returns per unit of risk. Dr Ing hc is currently generating about -0.17 per unit of risk. If you would invest 8,983 in Copa Holdings SA on August 25, 2024 and sell it today you would earn a total of 354.00 from holding Copa Holdings SA or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copa Holdings SA vs. Dr Ing hc
Performance |
| Timeline |
| Copa Holdings SA |
| Dr Ing hc |
Copa Holdings and Dr Ing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Dr Ing
The main advantage of trading using opposite Copa Holdings and Dr Ing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Dr Ing 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 Dr Ing will offset losses from the drop in Dr Ing'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 |
| Dr Ing vs. Dr Ing hc | Dr Ing vs. Mercedes Benz Group AG | Dr Ing vs. Porsche Automobile Holding | Dr Ing vs. Hermes International SA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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