Correlation Between Copa Holdings and Sphere Entertainment
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Sphere Entertainment 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 Sphere Entertainment 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 Sphere Entertainment Co, you can compare the effects of market volatilities on Copa Holdings and Sphere Entertainment 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 Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Sphere Entertainment.
Diversification Opportunities for Copa Holdings and Sphere Entertainment
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Copa and Sphere is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment 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 Sphere Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sphere Entertainment has no effect on the direction of Copa Holdings i.e., Copa Holdings and Sphere Entertainment go up and down completely randomly.
Pair Corralation between Copa Holdings and Sphere Entertainment
Considering the 90-day investment horizon Copa Holdings SA is expected to under-perform the Sphere Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Copa Holdings SA is 1.75 times less risky than Sphere Entertainment. The stock trades about -0.01 of its potential returns per unit of risk. The Sphere Entertainment Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,559 in Sphere Entertainment Co on August 31, 2024 and sell it today you would earn a total of 1,556 from holding Sphere Entertainment Co or generate 60.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copa Holdings SA vs. Sphere Entertainment Co
Performance |
| Timeline |
| Copa Holdings SA |
| Sphere Entertainment |
Copa Holdings and Sphere Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Sphere Entertainment
The main advantage of trading using opposite Copa Holdings and Sphere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Sphere Entertainment 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 Sphere Entertainment will offset losses from the drop in Sphere Entertainment's long position.| Copa Holdings vs. JetBlue Airways Corp | Copa Holdings vs. Allegiant Travel | Copa Holdings vs. SkyWest | Copa Holdings vs. Air Transport Services |
| Sphere Entertainment vs. Ihuman Inc | Sphere Entertainment vs. GoHealth | Sphere Entertainment vs. Aspen Insurance Holdings | Sphere Entertainment vs. Relx PLC ADR |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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