Correlation Between Copa Holdings and Paysafe
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Paysafe 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 Paysafe 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 Paysafe, you can compare the effects of market volatilities on Copa Holdings and Paysafe 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 Paysafe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Paysafe.
Diversification Opportunities for Copa Holdings and Paysafe
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Copa and Paysafe is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Paysafe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paysafe 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 Paysafe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paysafe has no effect on the direction of Copa Holdings i.e., Copa Holdings and Paysafe go up and down completely randomly.
Pair Corralation between Copa Holdings and Paysafe
Considering the 90-day investment horizon Copa Holdings SA is expected to generate 0.52 times more return on investment than Paysafe. However, Copa Holdings SA is 1.91 times less risky than Paysafe. It trades about -0.09 of its potential returns per unit of risk. Paysafe is currently generating about -0.13 per unit of risk. If you would invest 10,072 in Copa Holdings SA on August 24, 2024 and sell it today you would lose (735.00) from holding Copa Holdings SA or give up 7.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copa Holdings SA vs. Paysafe
Performance |
| Timeline |
| Copa Holdings SA |
| Paysafe |
Copa Holdings and Paysafe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Paysafe
The main advantage of trading using opposite Copa Holdings and Paysafe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Paysafe 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 Paysafe will offset losses from the drop in Paysafe'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 |
| Paysafe vs. Skillz Platform | Paysafe vs. SoFi Technologies | Paysafe vs. Clover Health Investments | Paysafe vs. Opendoor Technologies |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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