Correlation Between Globalfoundries and Copa Holdings
Can any of the company-specific risk be diversified away by investing in both Globalfoundries 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 Globalfoundries and Copa Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globalfoundries and Copa Holdings SA, you can compare the effects of market volatilities on Globalfoundries 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 Globalfoundries with a short position of Copa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globalfoundries and Copa Holdings.
Diversification Opportunities for Globalfoundries and Copa Holdings
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Globalfoundries and Copa is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Globalfoundries 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 Globalfoundries 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 Globalfoundries 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 Globalfoundries i.e., Globalfoundries and Copa Holdings go up and down completely randomly.
Pair Corralation between Globalfoundries and Copa Holdings
Considering the 90-day investment horizon Globalfoundries is expected to generate 1.56 times more return on investment than Copa Holdings. However, Globalfoundries is 1.56 times more volatile than Copa Holdings SA. It trades about 0.1 of its potential returns per unit of risk. Copa Holdings SA is currently generating about -0.1 per unit of risk. If you would invest 4,024 in Globalfoundries on August 29, 2024 and sell it today you would earn a total of 387.00 from holding Globalfoundries or generate 9.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globalfoundries vs. Copa Holdings SA
Performance |
| Timeline |
| Globalfoundries |
| Copa Holdings SA |
Globalfoundries and Copa Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globalfoundries and Copa Holdings
The main advantage of trading using opposite Globalfoundries and Copa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globalfoundries 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.| Globalfoundries vs. NXP Semiconductors NV | Globalfoundries vs. Analog Devices | Globalfoundries vs. ON Semiconductor | Globalfoundries vs. Lattice Semiconductor |
| Copa Holdings vs. SkyWest | Copa Holdings vs. Sun Country Airlines | Copa Holdings vs. Air Transport Services | Copa Holdings vs. Frontier Group Holdings |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |