Correlation Between Copa Holdings and Hypercharge Networks

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

Diversification Opportunities for Copa Holdings and Hypercharge Networks

-0.38

Correlation Coefficient

Copa Holdings  Hypercharge Networks

Very good diversification

The 3 months correlation between Copa and Hypercharge is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Hypercharge Networks Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hypercharge Networks Corp 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 Hypercharge Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hypercharge Networks Corp has no effect on the direction of Copa Holdings i.e., Copa Holdings and Hypercharge Networks go up and down completely randomly.

Pair Corralation between Copa Holdings and Hypercharge Networks

Considering the 90-day investment horizon Copa Holdings SA is expected to generate 0.23 times more return on investment than Hypercharge Networks. However, Copa Holdings SA is 4.26 times less risky than Hypercharge Networks. It trades about 0.03 of its potential returns per unit of risk. Hypercharge Networks Corp is currently generating about -0.01 per unit of risk. If you would invest  8,002  in Copa Holdings SA on December 3, 2024 and sell it today you would earn a total of  1,151  from holding Copa Holdings SA or generate 14.38% 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.  Hypercharge Networks Corp

Copa Holdings SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Copa Holdings SA are ranked lower than 3 (%) 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.

Hypercharge Networks Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hypercharge Networks Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, Hypercharge Networks may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Copa Holdings and Hypercharge Networks

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

The idea behind Copa Holdings SA and Hypercharge Networks Corp 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.