Correlation Between Carmat SA and Copa Holdings
Can any of the company-specific risk be diversified away by investing in both Carmat SA and Copa 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 Carmat SA and Copa Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmat SA and Copa Holdings SA, you can compare the effects of market volatilities on Carmat SA and Copa 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 Carmat SA with a short position of Copa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and Copa Holdings.
Diversification Opportunities for Carmat SA and Copa Holdings
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Carmat and Copa is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and Copa Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copa Holdings SA and Carmat SA 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 Carmat SA are associated (or correlated) with Copa Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copa Holdings SA has no effect on the direction of Carmat SA i.e., Carmat SA and Copa Holdings go up and down completely randomly.
Pair Corralation between Carmat SA and Copa Holdings
Assuming the 90 days horizon Carmat SA is expected to under-perform the Copa Holdings. In addition to that, Carmat SA is 2.57 times more volatile than Copa Holdings SA. It trades about -0.12 of its total potential returns per unit of risk. Copa Holdings SA is currently generating about 0.02 per unit of volatility. If you would invest 8,622 in Copa Holdings SA on September 1, 2024 and sell it today you would earn a total of 328.00 from holding Copa Holdings SA or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carmat SA vs. Copa Holdings SA
Performance |
| Timeline |
| Carmat SA |
| Copa Holdings SA |
Carmat SA and Copa Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmat SA and Copa Holdings
The main advantage of trading using opposite Carmat SA and Copa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmat SA position performs unexpectedly, Copa 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 Copa Holdings will offset losses from the drop in Copa Holdings' long position.| Carmat SA vs. National Retail Properties | Carmat SA vs. Sunstone Hotel Investors | Carmat SA vs. CARSALESCOM | Carmat SA vs. FAST RETAIL ADR |
| Copa Holdings vs. Southwest Airlines Co | Copa Holdings vs. Superior Plus Corp | Copa Holdings vs. NMI Holdings | Copa Holdings vs. Origin Agritech |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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