Correlation Between Copa Holdings and Triton International
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Triton International 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 Triton International 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 Triton International Limited, you can compare the effects of market volatilities on Copa Holdings and Triton International 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 Triton International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Triton International.
Diversification Opportunities for Copa Holdings and Triton International
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Copa and Triton is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Triton International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triton International 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 Triton International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triton International has no effect on the direction of Copa Holdings i.e., Copa Holdings and Triton International go up and down completely randomly.
Pair Corralation between Copa Holdings and Triton International
Considering the 90-day investment horizon Copa Holdings SA is expected to under-perform the Triton International. In addition to that, Copa Holdings is 5.83 times more volatile than Triton International Limited. It trades about -0.07 of its total potential returns per unit of risk. Triton International Limited is currently generating about 0.17 per unit of volatility. If you would invest 2,480 in Triton International Limited on August 31, 2024 and sell it today you would earn a total of 48.00 from holding Triton International Limited or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copa Holdings SA vs. Triton International Limited
Performance |
| Timeline |
| Copa Holdings SA |
| Triton International |
Copa Holdings and Triton International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Triton International
The main advantage of trading using opposite Copa Holdings and Triton International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Triton International 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 Triton International will offset losses from the drop in Triton International'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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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