Correlation Between Copa Holdings and KKRS
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and KKRS 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 KKRS 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 KKRS, you can compare the effects of market volatilities on Copa Holdings and KKRS 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 KKRS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and KKRS.
Diversification Opportunities for Copa Holdings and KKRS
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Copa and KKRS is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and KKRS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KKRS 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 KKRS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KKRS has no effect on the direction of Copa Holdings i.e., Copa Holdings and KKRS go up and down completely randomly.
Pair Corralation between Copa Holdings and KKRS
Considering the 90-day investment horizon Copa Holdings SA is expected to under-perform the KKRS. In addition to that, Copa Holdings is 2.17 times more volatile than KKRS. It trades about -0.03 of its total potential returns per unit of risk. KKRS is currently generating about 0.04 per unit of volatility. If you would invest 1,809 in KKRS on September 18, 2024 and sell it today you would earn a total of 106.00 from holding KKRS or generate 5.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Copa Holdings SA vs. KKRS
Performance |
Timeline |
Copa Holdings SA |
KKRS |
Copa Holdings and KKRS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Copa Holdings and KKRS
The main advantage of trading using opposite Copa Holdings and KKRS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, KKRS 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 KKRS will offset losses from the drop in KKRS's long position.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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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