Correlation Between Copa Holdings and IShares MSCI

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

Diversification Opportunities for Copa Holdings and IShares MSCI

0.0

Correlation Coefficient

Copa Holdings  IShares MSCI

Pay attention - limited upside

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

Pair Corralation between Copa Holdings and IShares MSCI

If you would invest  8,733  in Copa Holdings SA on December 20, 2024 and sell it today you would earn a total of  814.00  from holding Copa Holdings SA or generate 9.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Copa Holdings SA  vs.  iShares MSCI

Copa Holdings SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Copa Holdings SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Copa Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

iShares MSCI

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares MSCI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, IShares MSCI 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 IShares MSCI

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

The idea behind Copa Holdings SA and iShares MSCI 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.