Correlation Between Copa Holdings and Univest Pennsylvania
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Univest Pennsylvania 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 Univest Pennsylvania 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 Univest Pennsylvania, you can compare the effects of market volatilities on Copa Holdings and Univest Pennsylvania 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 Univest Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Univest Pennsylvania.
Diversification Opportunities for Copa Holdings and Univest Pennsylvania
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Copa and Univest is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Univest Pennsylvania in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univest Pennsylvania 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 Univest Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univest Pennsylvania has no effect on the direction of Copa Holdings i.e., Copa Holdings and Univest Pennsylvania go up and down completely randomly.
Pair Corralation between Copa Holdings and Univest Pennsylvania
Considering the 90-day investment horizon Copa Holdings SA is expected to generate 1.02 times more return on investment than Univest Pennsylvania. However, Copa Holdings is 1.02 times more volatile than Univest Pennsylvania. It trades about 0.07 of its potential returns per unit of risk. Univest Pennsylvania is currently generating about 0.01 per unit of risk. If you would invest 8,860 in Copa Holdings SA on October 20, 2024 and sell it today you would earn a total of 171.00 from holding Copa Holdings SA or generate 1.93% 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. Univest Pennsylvania
Performance |
Timeline |
Copa Holdings SA |
Univest Pennsylvania |
Copa Holdings and Univest Pennsylvania Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Copa Holdings and Univest Pennsylvania
The main advantage of trading using opposite Copa Holdings and Univest Pennsylvania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Univest Pennsylvania 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 Univest Pennsylvania will offset losses from the drop in Univest Pennsylvania'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 |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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