Correlation Between SPARTAN STORES and Copa Holdings
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES 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 SPARTAN STORES and Copa Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and Copa Holdings SA, you can compare the effects of market volatilities on SPARTAN STORES 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 SPARTAN STORES with a short position of Copa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and Copa Holdings.
Diversification Opportunities for SPARTAN STORES and Copa Holdings
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPARTAN and Copa is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES 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 SPARTAN STORES 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 SPARTAN STORES 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 SPARTAN STORES i.e., SPARTAN STORES and Copa Holdings go up and down completely randomly.
Pair Corralation between SPARTAN STORES and Copa Holdings
Assuming the 90 days trading horizon SPARTAN STORES is expected to under-perform the Copa Holdings. But the stock apears to be less risky and, when comparing its historical volatility, SPARTAN STORES is 1.05 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 0.03 of returns per unit of risk over similar time horizon. If you would invest 7,095 in Copa Holdings SA on August 31, 2024 and sell it today you would earn a total of 1,555 from holding Copa Holdings SA or generate 21.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPARTAN STORES vs. Copa Holdings SA
Performance |
| Timeline |
| SPARTAN STORES |
| Copa Holdings SA |
SPARTAN STORES and Copa Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPARTAN STORES and Copa Holdings
The main advantage of trading using opposite SPARTAN STORES and Copa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES 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.| SPARTAN STORES vs. SIVERS SEMICONDUCTORS AB | SPARTAN STORES vs. Darden Restaurants | SPARTAN STORES vs. Reliance Steel Aluminum | SPARTAN STORES vs. Q2M Managementberatung AG |
| Copa Holdings vs. Nufarm Limited | Copa Holdings vs. AGRICULTBK HADR25 YC | Copa Holdings vs. JJ SNACK FOODS | Copa Holdings vs. Daito Trust Construction |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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