Correlation Between Copa Holdings and Kite Realty
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Kite Realty 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 Kite Realty 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 Kite Realty Group, you can compare the effects of market volatilities on Copa Holdings and Kite Realty 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 Kite Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Kite Realty.
Diversification Opportunities for Copa Holdings and Kite Realty
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Copa and Kite is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Kite Realty Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kite Realty Group 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 Kite Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kite Realty Group has no effect on the direction of Copa Holdings i.e., Copa Holdings and Kite Realty go up and down completely randomly.
Pair Corralation between Copa Holdings and Kite Realty
Considering the 90-day investment horizon Copa Holdings is expected to generate 1.47 times less return on investment than Kite Realty. In addition to that, Copa Holdings is 1.29 times more volatile than Kite Realty Group. It trades about 0.03 of its total potential returns per unit of risk. Kite Realty Group is currently generating about 0.06 per unit of volatility. If you would invest 1,925 in Kite Realty Group on August 28, 2024 and sell it today you would earn a total of 821.00 from holding Kite Realty Group or generate 42.65% 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. Kite Realty Group
Performance |
| Timeline |
| Copa Holdings SA |
| Kite Realty Group |
Copa Holdings and Kite Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Kite Realty
The main advantage of trading using opposite Copa Holdings and Kite Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Kite Realty 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 Kite Realty will offset losses from the drop in Kite Realty'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 |
| Kite Realty vs. Site Centers Corp | Kite Realty vs. CBL Associates Properties | Kite Realty vs. Urban Edge Properties | Kite Realty vs. Acadia Realty Trust |
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.
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