Correlation Between Copa Holdings and Stingray
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Stingray 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 Stingray 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 Stingray Group, you can compare the effects of market volatilities on Copa Holdings and Stingray 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 Stingray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Stingray.
Diversification Opportunities for Copa Holdings and Stingray
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Copa and Stingray is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Stingray Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stingray Group 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 Stingray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stingray Group has no effect on the direction of Copa Holdings i.e., Copa Holdings and Stingray go up and down completely randomly.
Pair Corralation between Copa Holdings and Stingray
Considering the 90-day investment horizon Copa Holdings SA is expected to under-perform the Stingray. In addition to that, Copa Holdings is 1.01 times more volatile than Stingray Group. It trades about 0.0 of its total potential returns per unit of risk. Stingray Group is currently generating about 0.03 per unit of volatility. If you would invest 529.00 in Stingray Group on August 31, 2024 and sell it today you would earn a total of 32.00 from holding Stingray Group or generate 6.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Copa Holdings SA vs. Stingray Group
Performance |
| Timeline |
| Copa Holdings SA |
| Stingray Group |
Copa Holdings and Stingray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Stingray
The main advantage of trading using opposite Copa Holdings and Stingray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Stingray 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 Stingray will offset losses from the drop in Stingray's long position.| Copa Holdings vs. JetBlue Airways Corp | Copa Holdings vs. Allegiant Travel | Copa Holdings vs. SkyWest | Copa Holdings vs. Air Transport Services |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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