Correlation Between Copa Holdings and Northstar Clean
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Northstar Clean 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 Northstar Clean 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 Northstar Clean Technologies, you can compare the effects of market volatilities on Copa Holdings and Northstar Clean 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 Northstar Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Northstar Clean.
Diversification Opportunities for Copa Holdings and Northstar Clean
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Copa and Northstar is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Northstar Clean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northstar Clean Tech 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 Northstar Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northstar Clean Tech has no effect on the direction of Copa Holdings i.e., Copa Holdings and Northstar Clean go up and down completely randomly.
Pair Corralation between Copa Holdings and Northstar Clean
Considering the 90-day investment horizon Copa Holdings SA is expected to under-perform the Northstar Clean. But the stock apears to be less risky and, when comparing its historical volatility, Copa Holdings SA is 2.54 times less risky than Northstar Clean. The stock trades about -0.01 of its potential returns per unit of risk. The Northstar Clean Technologies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Northstar Clean Technologies on August 28, 2024 and sell it today you would earn a total of 7.00 from holding Northstar Clean Technologies or generate 53.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Copa Holdings SA vs. Northstar Clean Technologies
Performance |
| Timeline |
| Copa Holdings SA |
| Northstar Clean Tech |
Copa Holdings and Northstar Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Northstar Clean
The main advantage of trading using opposite Copa Holdings and Northstar Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Northstar Clean 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 Northstar Clean will offset losses from the drop in Northstar Clean'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 |
| Northstar Clean vs. Republic Services | Northstar Clean vs. Waste Connections | Northstar Clean vs. Clean Harbors | Northstar Clean vs. Gfl Environmental 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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