Correlation Between Copa Holdings and Oasis Petroleum
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Oasis Petroleum 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 Oasis Petroleum 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 Oasis Petroleum, you can compare the effects of market volatilities on Copa Holdings and Oasis Petroleum 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 Oasis Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Oasis Petroleum.
Diversification Opportunities for Copa Holdings and Oasis Petroleum
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Copa and Oasis is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Oasis Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oasis Petroleum 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 Oasis Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oasis Petroleum has no effect on the direction of Copa Holdings i.e., Copa Holdings and Oasis Petroleum go up and down completely randomly.
Pair Corralation between Copa Holdings and Oasis Petroleum
Considering the 90-day investment horizon Copa Holdings SA is expected to under-perform the Oasis Petroleum. But the stock apears to be less risky and, when comparing its historical volatility, Copa Holdings SA is 1.32 times less risky than Oasis Petroleum. The stock trades about -0.04 of its potential returns per unit of risk. The Oasis Petroleum is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,159 in Oasis Petroleum on August 30, 2024 and sell it today you would earn a total of 342.00 from holding Oasis Petroleum or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 69.57% |
| Values | Daily Returns |
Copa Holdings SA vs. Oasis Petroleum
Performance |
| Timeline |
| Copa Holdings SA |
| Oasis Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Copa Holdings and Oasis Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Oasis Petroleum
The main advantage of trading using opposite Copa Holdings and Oasis Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Oasis Petroleum 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 Oasis Petroleum will offset losses from the drop in Oasis Petroleum's long position.| Copa Holdings vs. American Airlines Group | Copa Holdings vs. Southwest Airlines | Copa Holdings vs. Frontier Group Holdings |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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