Correlation Between Copa Holdings and X3 Holdings
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and X3 Holdings 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 X3 Holdings 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 X3 Holdings Co, you can compare the effects of market volatilities on Copa Holdings and X3 Holdings 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 X3 Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and X3 Holdings.
Diversification Opportunities for Copa Holdings and X3 Holdings
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Copa and XTKG is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and X3 Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X3 Holdings 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 X3 Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X3 Holdings has no effect on the direction of Copa Holdings i.e., Copa Holdings and X3 Holdings go up and down completely randomly.
Pair Corralation between Copa Holdings and X3 Holdings
Considering the 90-day investment horizon Copa Holdings SA is expected to under-perform the X3 Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Copa Holdings SA is 6.33 times less risky than X3 Holdings. The stock trades about -0.27 of its potential returns per unit of risk. The X3 Holdings Co is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 63.00 in X3 Holdings Co on January 5, 2025 and sell it today you would earn a total of 48.00 from holding X3 Holdings Co or generate 76.19% 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. X3 Holdings Co
Performance |
| Timeline |
| Copa Holdings SA |
| X3 Holdings |
Copa Holdings and X3 Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and X3 Holdings
The main advantage of trading using opposite Copa Holdings and X3 Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, X3 Holdings 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 X3 Holdings will offset losses from the drop in X3 Holdings' 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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