Correlation Between Spectra Systems and Copa Holdings
Can any of the company-specific risk be diversified away by investing in both Spectra Systems 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 Spectra Systems and Copa Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spectra Systems and Copa Holdings SA, you can compare the effects of market volatilities on Spectra Systems 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 Spectra Systems with a short position of Copa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spectra Systems and Copa Holdings.
Diversification Opportunities for Spectra Systems and Copa Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Spectra and Copa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Spectra Systems 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 Spectra Systems 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 Spectra Systems 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 Spectra Systems i.e., Spectra Systems and Copa Holdings go up and down completely randomly.
Pair Corralation between Spectra Systems and Copa Holdings
Given the investment horizon of 90 days Spectra Systems is expected to generate 0.25 times more return on investment than Copa Holdings. However, Spectra Systems is 3.94 times less risky than Copa Holdings. It trades about 0.08 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 181.00 in Spectra Systems on August 29, 2024 and sell it today you would earn a total of 22.00 from holding Spectra Systems or generate 12.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spectra Systems vs. Copa Holdings SA
Performance |
| Timeline |
| Spectra Systems |
| Copa Holdings SA |
Spectra Systems and Copa Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spectra Systems and Copa Holdings
The main advantage of trading using opposite Spectra Systems and Copa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spectra Systems 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.| Spectra Systems vs. Apple Inc | Spectra Systems vs. Microsoft | Spectra Systems vs. Alphabet Inc Class C | Spectra Systems vs. Meta Platforms |
| 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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