Correlation Between Copa Holdings and IONQ WT

Can any of the company-specific risk be diversified away by investing in both Copa Holdings and IONQ WT 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 Copa Holdings and IONQ WT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Copa Holdings SA and IONQ WT, you can compare the effects of market volatilities on Copa Holdings and IONQ WT 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 Copa Holdings with a short position of IONQ WT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and IONQ WT.

Diversification Opportunities for Copa Holdings and IONQ WT

0.0

Correlation Coefficient

Copa Holdings  IONQ WT

Pay attention - limited upside

The 3 months correlation between Copa and IONQ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and IONQ WT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IONQ WT and Copa Holdings 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 Copa Holdings SA are associated (or correlated) with IONQ WT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IONQ WT has no effect on the direction of Copa Holdings i.e., Copa Holdings and IONQ WT go up and down completely randomly.

Pair Corralation between Copa Holdings and IONQ WT

Considering the 90-day investment horizon Copa Holdings SA is expected to generate 0.34 times more return on investment than IONQ WT. However, Copa Holdings SA is 2.9 times less risky than IONQ WT. It trades about 0.0 of its potential returns per unit of risk. IONQ WT is currently generating about -0.8 per unit of risk. If you would invest  9,483  in Copa Holdings SA on September 14, 2024 and sell it today you would lose (670.00) from holding Copa Holdings SA or give up 7.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.02%
Values	Daily Returns

Copa Holdings SA  vs.  IONQ WT

Copa Holdings SA

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Copa Holdings SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Copa Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

IONQ WT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IONQ WT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Copa Holdings and IONQ WT

The main advantage of trading using opposite Copa Holdings and IONQ WT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, IONQ WT 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 IONQ WT will offset losses from the drop in IONQ WT's long position.

The idea behind Copa Holdings SA and IONQ WT 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.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.