Correlation Between Nok Airlines and Copa Holdings

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Nok Airlines 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 Nok Airlines and Copa Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nok Airlines Public and Copa Holdings SA, you can compare the effects of market volatilities on Nok Airlines 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 Nok Airlines with a short position of Copa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nok Airlines and Copa Holdings.

Diversification Opportunities for Nok Airlines and Copa Holdings

-0.25
  Correlation Coefficient

Very good diversification

The 3 months correlation between Nok and Copa is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nok Airlines Public 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 Nok Airlines 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 Nok Airlines Public 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 Nok Airlines i.e., Nok Airlines and Copa Holdings go up and down completely randomly.

Pair Corralation between Nok Airlines and Copa Holdings

Assuming the 90 days horizon Nok Airlines Public is expected to generate 86.86 times more return on investment than Copa Holdings. However, Nok Airlines is 86.86 times more volatile than Copa Holdings SA. It trades about 0.18 of its potential returns per unit of risk. Copa Holdings SA is currently generating about 0.0 per unit of risk. If you would invest  0.60  in Nok Airlines Public on October 14, 2024 and sell it today you would lose (0.10) from holding Nok Airlines Public or give up 16.67% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Nok Airlines Public  vs.  Copa Holdings SA

 Performance 
       Timeline  
Nok Airlines Public 

Risk-Adjusted Performance

23 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Nok Airlines Public are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nok Airlines reported solid returns over the last few months and may actually be approaching a breakup point.
Copa Holdings SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Copa Holdings SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Nok Airlines and Copa Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nok Airlines and Copa Holdings

The main advantage of trading using opposite Nok Airlines and Copa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nok Airlines 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.
The idea behind Nok Airlines Public and Copa Holdings SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

Other Complementary Tools

Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
CEOs Directory
Screen CEOs from public companies around the world
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine