Correlation Between Joby Aviation and Copa Holdings
Can any of the company-specific risk be diversified away by investing in both Joby 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 Joby 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 Joby Aviation and Copa Holdings SA, you can compare the effects of market volatilities on Joby 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 Joby Aviation with a short position of Copa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Joby Aviation and Copa Holdings.
Diversification Opportunities for Joby Aviation and Copa Holdings
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Joby and Copa is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Joby Aviation 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 Joby 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 Joby Aviation 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 Joby Aviation i.e., Joby Aviation and Copa Holdings go up and down completely randomly.
Pair Corralation between Joby Aviation and Copa Holdings
Assuming the 90 days trading horizon Joby Aviation is expected to generate 4.1 times more return on investment than Copa Holdings. However, Joby Aviation is 4.1 times more volatile than Copa Holdings SA. It trades about 0.19 of its potential returns per unit of risk. Copa Holdings SA is currently generating about -0.09 per unit of risk. If you would invest 97.00 in Joby Aviation on August 24, 2024 and sell it today you would earn a total of 50.00 from holding Joby Aviation or generate 51.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Joby Aviation vs. Copa Holdings SA
Performance |
| Timeline |
| Joby Aviation |
| Copa Holdings SA |
Joby Aviation and Copa Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Joby Aviation and Copa Holdings
The main advantage of trading using opposite Joby Aviation and Copa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Joby 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.| Joby Aviation vs. Copa Holdings SA | Joby Aviation vs. United Airlines Holdings | Joby Aviation vs. Delta Air Lines | Joby Aviation vs. SkyWest |
| 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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