Correlation Between Copa Holdings and Manulife Financial

Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Manulife Financial 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 Manulife Financial 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 Manulife Financial, you can compare the effects of market volatilities on Copa Holdings and Manulife Financial 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 Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Manulife Financial.

Diversification Opportunities for Copa Holdings and Manulife Financial

0.0

Correlation Coefficient

Copa Holdings  Manulife Financial

Pay attention - limited upside

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

Pair Corralation between Copa Holdings and Manulife Financial

If you would invest  2,882  in Manulife Financial on December 29, 2024 and sell it today you would lose (6.00) from holding Manulife Financial or give up 0.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Copa Holdings SA  vs.  Manulife Financial

Copa Holdings SA

Risk-Adjusted Performance

OK

Over the last 90 days Copa Holdings SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Copa Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Manulife Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Manulife Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Manulife Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Copa Holdings and Manulife Financial

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

The idea behind Copa Holdings SA and Manulife Financial 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.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.