Correlation Between Mitie Group and Copa Holdings
Can any of the company-specific risk be diversified away by investing in both Mitie Group 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 Mitie Group and Copa Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitie Group PLC and Copa Holdings SA, you can compare the effects of market volatilities on Mitie Group 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 Mitie Group with a short position of Copa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitie Group and Copa Holdings.
Diversification Opportunities for Mitie Group and Copa Holdings
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitie and Copa is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Mitie Group PLC 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 Mitie Group 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 Mitie Group PLC 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 Mitie Group i.e., Mitie Group and Copa Holdings go up and down completely randomly.
Pair Corralation between Mitie Group and Copa Holdings
Assuming the 90 days horizon Mitie Group PLC is expected to under-perform the Copa Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Mitie Group PLC is 1.04 times less risky than Copa Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The Copa Holdings SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 8,622 in Copa Holdings SA on September 1, 2024 and sell it today you would earn a total of 328.00 from holding Copa Holdings SA or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitie Group PLC vs. Copa Holdings SA
Performance |
| Timeline |
| Mitie Group PLC |
| Copa Holdings SA |
Mitie Group and Copa Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitie Group and Copa Holdings
The main advantage of trading using opposite Mitie Group and Copa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitie Group 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.| Mitie Group vs. Sekisui Chemical Co | Mitie Group vs. Retail Estates NV | Mitie Group vs. COSTCO WHOLESALE CDR | Mitie Group vs. BJs Wholesale Club |
| Copa Holdings vs. Southwest Airlines Co | Copa Holdings vs. Superior Plus Corp | Copa Holdings vs. NMI Holdings | Copa Holdings vs. Origin Agritech |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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