Correlation Between Copa Holdings and Funko
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Funko 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 Funko 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 Funko Inc, you can compare the effects of market volatilities on Copa Holdings and Funko 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 Funko. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Funko.
Diversification Opportunities for Copa Holdings and Funko
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Copa and Funko is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Funko Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Funko 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 Funko. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Funko Inc has no effect on the direction of Copa Holdings i.e., Copa Holdings and Funko go up and down completely randomly.
Pair Corralation between Copa Holdings and Funko
Considering the 90-day investment horizon Copa Holdings is expected to generate 1.77 times less return on investment than Funko. But when comparing it to its historical volatility, Copa Holdings SA is 1.93 times less risky than Funko. It trades about 0.03 of its potential returns per unit of risk. Funko Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,023 in Funko Inc on September 4, 2024 and sell it today you would earn a total of 160.00 from holding Funko Inc or generate 15.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copa Holdings SA vs. Funko Inc
Performance |
| Timeline |
| Copa Holdings SA |
| Funko Inc |
Copa Holdings and Funko Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Funko
The main advantage of trading using opposite Copa Holdings and Funko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Funko 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 Funko will offset losses from the drop in Funko's long position.| Copa Holdings vs. Delta Air Lines | Copa Holdings vs. United Airlines Holdings | Copa Holdings vs. Frontier Group Holdings |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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