Correlation Between Ituran Location and Copa Holdings
Can any of the company-specific risk be diversified away by investing in both Ituran Location 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 Ituran Location and Copa Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ituran Location and and Copa Holdings SA, you can compare the effects of market volatilities on Ituran Location 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 Ituran Location with a short position of Copa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ituran Location and Copa Holdings.
Diversification Opportunities for Ituran Location and Copa Holdings
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ituran and Copa is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ituran Location and 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 Ituran Location 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 Ituran Location and 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 Ituran Location i.e., Ituran Location and Copa Holdings go up and down completely randomly.
Pair Corralation between Ituran Location and Copa Holdings
Given the investment horizon of 90 days Ituran Location and is expected to generate 0.48 times more return on investment than Copa Holdings. However, Ituran Location and is 2.07 times less risky than Copa Holdings. It trades about 0.34 of its potential returns per unit of risk. Copa Holdings SA is currently generating about -0.11 per unit of risk. If you would invest 2,780 in Ituran Location and on September 12, 2024 and sell it today you would earn a total of 324.00 from holding Ituran Location and or generate 11.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ituran Location and vs. Copa Holdings SA
Performance |
| Timeline |
| Ituran Location |
| Copa Holdings SA |
Ituran Location and Copa Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ituran Location and Copa Holdings
The main advantage of trading using opposite Ituran Location and Copa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ituran Location 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.| Ituran Location vs. Silicom | Ituran Location vs. Allot Communications | Ituran Location vs. Sapiens International | Ituran Location vs. Formula Systems 1985 |
| Copa Holdings vs. Volaris | Copa Holdings vs. flyExclusive, | Copa Holdings vs. Alaska Air Group | Copa Holdings vs. LATAM Airlines Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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