Correlation Between Emerson Radio and Copa Holdings
Can any of the company-specific risk be diversified away by investing in both Emerson Radio 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 Emerson Radio and Copa Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Radio and Copa Holdings SA, you can compare the effects of market volatilities on Emerson Radio 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 Emerson Radio with a short position of Copa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Radio and Copa Holdings.
Diversification Opportunities for Emerson Radio and Copa Holdings
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Emerson and Copa is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Radio 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 Emerson Radio 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 Emerson Radio 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 Emerson Radio i.e., Emerson Radio and Copa Holdings go up and down completely randomly.
Pair Corralation between Emerson Radio and Copa Holdings
Considering the 90-day investment horizon Emerson Radio is expected to under-perform the Copa Holdings. In addition to that, Emerson Radio is 1.55 times more volatile than Copa Holdings SA. It trades about -0.01 of its total potential returns per unit of risk. Copa Holdings SA is currently generating about 0.03 per unit of volatility. If you would invest 7,561 in Copa Holdings SA on September 4, 2024 and sell it today you would earn a total of 1,533 from holding Copa Holdings SA or generate 20.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerson Radio vs. Copa Holdings SA
Performance |
| Timeline |
| Emerson Radio |
| Copa Holdings SA |
Emerson Radio and Copa Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Radio and Copa Holdings
The main advantage of trading using opposite Emerson Radio and Copa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Radio 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.| Emerson Radio vs. VOXX International | Emerson Radio vs. LG Display Co | Emerson Radio vs. Vizio Holding Corp | Emerson Radio vs. Turtle Beach Corp |
| Copa Holdings vs. Delta Air Lines | Copa Holdings vs. United Airlines Holdings | 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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