Correlation Between Copa Holdings and Companhia Paranaense
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Companhia Paranaense 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 Companhia Paranaense 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 Companhia Paranaense de, you can compare the effects of market volatilities on Copa Holdings and Companhia Paranaense 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 Companhia Paranaense. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Companhia Paranaense.
Diversification Opportunities for Copa Holdings and Companhia Paranaense
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Copa and Companhia is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Companhia Paranaense de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Paranaense 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 Companhia Paranaense. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Paranaense has no effect on the direction of Copa Holdings i.e., Copa Holdings and Companhia Paranaense go up and down completely randomly.
Pair Corralation between Copa Holdings and Companhia Paranaense
Considering the 90-day investment horizon Copa Holdings SA is expected to generate 0.78 times more return on investment than Companhia Paranaense. However, Copa Holdings SA is 1.29 times less risky than Companhia Paranaense. It trades about 0.04 of its potential returns per unit of risk. Companhia Paranaense de is currently generating about -0.1 per unit of risk. If you would invest 8,852 in Copa Holdings SA on October 11, 2024 and sell it today you would earn a total of 85.00 from holding Copa Holdings SA or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copa Holdings SA vs. Companhia Paranaense de
Performance |
| Timeline |
| Copa Holdings SA |
| Companhia Paranaense |
Copa Holdings and Companhia Paranaense Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Companhia Paranaense
The main advantage of trading using opposite Copa Holdings and Companhia Paranaense positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Companhia Paranaense 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 Companhia Paranaense will offset losses from the drop in Companhia Paranaense'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 |
| Companhia Paranaense vs. Consol Energy | Companhia Paranaense vs. American Airlines Group | Companhia Paranaense vs. Azul SA | Companhia Paranaense vs. Copa Holdings 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |