Correlation Between Copa Holdings and Treasury Wine
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Treasury Wine 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 Treasury Wine 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 Treasury Wine Estates, you can compare the effects of market volatilities on Copa Holdings and Treasury Wine 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 Treasury Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Treasury Wine.
Diversification Opportunities for Copa Holdings and Treasury Wine
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Copa and Treasury is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Treasury Wine Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treasury Wine Estates 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 Treasury Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treasury Wine Estates has no effect on the direction of Copa Holdings i.e., Copa Holdings and Treasury Wine go up and down completely randomly.
Pair Corralation between Copa Holdings and Treasury Wine
Considering the 90-day investment horizon Copa Holdings SA is expected to generate 1.2 times more return on investment than Treasury Wine. However, Copa Holdings is 1.2 times more volatile than Treasury Wine Estates. It trades about -0.09 of its potential returns per unit of risk. Treasury Wine Estates is currently generating about -0.17 per unit of risk. If you would invest 10,084 in Copa Holdings SA on August 25, 2024 and sell it today you would lose (747.00) from holding Copa Holdings SA or give up 7.41% 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. Treasury Wine Estates
Performance |
| Timeline |
| Copa Holdings SA |
| Treasury Wine Estates |
Copa Holdings and Treasury Wine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Treasury Wine
The main advantage of trading using opposite Copa Holdings and Treasury Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Treasury Wine 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 Treasury Wine will offset losses from the drop in Treasury Wine'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 |
| Treasury Wine vs. Diageo PLC ADR | Treasury Wine vs. Constellation Brands Class | Treasury Wine vs. Thai Beverage PCL | Treasury Wine vs. Morningstar Unconstrained Allocation |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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