Correlation Between Copa Holdings and Chocoladefabriken

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

Diversification Opportunities for Copa Holdings and Chocoladefabriken

0.0

Correlation Coefficient

Copa Holdings  Chocoladefabriken

Pay attention - limited upside

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

Pair Corralation between Copa Holdings and Chocoladefabriken

If you would invest  8,692  in Copa Holdings SA on September 12, 2024 and sell it today you would earn a total of  278.50  from holding Copa Holdings SA or generate 3.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Copa Holdings SA  vs.  Chocoladefabriken Lindt Sprngl

Copa Holdings SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Copa Holdings SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Chocoladefabriken Lindt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chocoladefabriken Lindt Sprngli has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Chocoladefabriken 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 Chocoladefabriken

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

The idea behind Copa Holdings SA and Chocoladefabriken Lindt Sprngli 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.