Correlation Between Copa Holdings and NetMed
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and NetMed 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 NetMed 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 NetMed Inc, you can compare the effects of market volatilities on Copa Holdings and NetMed 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 NetMed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and NetMed.
Diversification Opportunities for Copa Holdings and NetMed
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Copa and NetMed is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and NetMed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetMed 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 NetMed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetMed Inc has no effect on the direction of Copa Holdings i.e., Copa Holdings and NetMed go up and down completely randomly.
Pair Corralation between Copa Holdings and NetMed
If you would invest (100.00) in NetMed Inc on September 14, 2024 and sell it today you would earn a total of 100.00 from holding NetMed Inc or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Copa Holdings SA vs. NetMed Inc
Performance |
| Timeline |
| Copa Holdings SA |
| NetMed Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Copa Holdings and NetMed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and NetMed
The main advantage of trading using opposite Copa Holdings and NetMed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, NetMed 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 NetMed will offset losses from the drop in NetMed's long position.| Copa Holdings vs. Southwest Airlines | Copa Holdings vs. United Airlines Holdings | Copa Holdings vs. Frontier Group Holdings |
| NetMed vs. Perseus Mining Limited | NetMed vs. Barrick Gold Corp | NetMed vs. Micron Technology | NetMed vs. MACOM Technology Solutions |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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