Correlation Between Copa Holdings and Osaka Steel

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

Diversification Opportunities for Copa Holdings and Osaka Steel

0.0

Correlation Coefficient

Copa Holdings  Osaka Steel

Pay attention - limited upside

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

Pair Corralation between Copa Holdings and Osaka Steel

If you would invest  8,709  in Copa Holdings SA on December 24, 2024 and sell it today you would earn a total of  828.00  from holding Copa Holdings SA or generate 9.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Copa Holdings SA  vs.  Osaka Steel Co,

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 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.

Osaka Steel Co,

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Copa Holdings and Osaka Steel

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

The idea behind Copa Holdings SA and Osaka Steel Co, 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.