Correlation Between FTAI Aviation and Copa Holdings
Can any of the company-specific risk be diversified away by investing in both FTAI Aviation 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 FTAI Aviation and Copa Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTAI Aviation Ltd and Copa Holdings SA, you can compare the effects of market volatilities on FTAI Aviation 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 FTAI Aviation with a short position of Copa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Aviation and Copa Holdings.
Diversification Opportunities for FTAI Aviation and Copa Holdings
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FTAI and Copa is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd 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 FTAI Aviation 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 FTAI Aviation Ltd 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 FTAI Aviation i.e., FTAI Aviation and Copa Holdings go up and down completely randomly.
Pair Corralation between FTAI Aviation and Copa Holdings
Assuming the 90 days horizon FTAI Aviation Ltd is expected to generate 0.66 times more return on investment than Copa Holdings. However, FTAI Aviation Ltd is 1.52 times less risky than Copa Holdings. It trades about 0.06 of its potential returns per unit of risk. Copa Holdings SA is currently generating about 0.03 per unit of risk. If you would invest 2,121 in FTAI Aviation Ltd on September 2, 2024 and sell it today you would earn a total of 667.00 from holding FTAI Aviation Ltd or generate 31.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 88.1% |
| Values | Daily Returns |
FTAI Aviation Ltd vs. Copa Holdings SA
Performance |
| Timeline |
| FTAI Aviation |
| Copa Holdings SA |
FTAI Aviation and Copa Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAI Aviation and Copa Holdings
The main advantage of trading using opposite FTAI Aviation and Copa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAI Aviation 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.| FTAI Aviation vs. SunOpta | FTAI Aviation vs. Grocery Outlet Holding | FTAI Aviation vs. SNDL Inc | FTAI Aviation vs. NH Foods Ltd |
| Copa Holdings vs. Canadian Pacific Railway | Copa Holdings vs. Werner Enterprises | Copa Holdings vs. Canadian National Railway | Copa Holdings vs. CSX Corporation |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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