Correlation Between Pinterest and Copa Holdings
Can any of the company-specific risk be diversified away by investing in both Pinterest 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 Pinterest and Copa Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinterest and Copa Holdings SA, you can compare the effects of market volatilities on Pinterest 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 Pinterest with a short position of Copa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinterest and Copa Holdings.
Diversification Opportunities for Pinterest and Copa Holdings
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pinterest and Copa is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest 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 Pinterest 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 Pinterest 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 Pinterest i.e., Pinterest and Copa Holdings go up and down completely randomly.
Pair Corralation between Pinterest and Copa Holdings
Given the investment horizon of 90 days Pinterest is expected to generate 1.44 times more return on investment than Copa Holdings. However, Pinterest is 1.44 times more volatile than Copa Holdings SA. It trades about 0.04 of its potential returns per unit of risk. Copa Holdings SA is currently generating about -0.01 per unit of risk. If you would invest 2,394 in Pinterest on August 31, 2024 and sell it today you would earn a total of 638.00 from holding Pinterest or generate 26.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Pinterest vs. Copa Holdings SA
Performance |
| Timeline |
| Copa Holdings SA |
Pinterest and Copa Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinterest and Copa Holdings
The main advantage of trading using opposite Pinterest and Copa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinterest 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.| Pinterest vs. Twilio Inc | Pinterest vs. Meta Platforms | Pinterest vs. Alphabet Inc Class C | Pinterest vs. Alphabet Inc Class A |
| Copa Holdings vs. JetBlue Airways Corp | Copa Holdings vs. Allegiant Travel | Copa Holdings vs. SkyWest | Copa Holdings vs. Air Transport Services |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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