Correlation Between Copa Holdings and Solidion Technology

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

Diversification Opportunities for Copa Holdings and Solidion Technology

-0.64

Correlation Coefficient

Copa Holdings  Solidion Technology

Excellent diversification

The 3 months correlation between Copa and Solidion is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Solidion Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solidion Technology 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 Solidion Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solidion Technology has no effect on the direction of Copa Holdings i.e., Copa Holdings and Solidion Technology go up and down completely randomly.

Pair Corralation between Copa Holdings and Solidion Technology

Considering the 90-day investment horizon Copa Holdings SA is expected to generate 0.13 times more return on investment than Solidion Technology. However, Copa Holdings SA is 7.86 times less risky than Solidion Technology. It trades about 0.08 of its potential returns per unit of risk. Solidion Technology is currently generating about -0.05 per unit of risk. If you would invest  8,706  in Copa Holdings SA on December 19, 2024 and sell it today you would earn a total of  660.00  from holding Copa Holdings SA or generate 7.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Copa Holdings SA  vs.  Solidion Technology

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 6 (%) 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.

Solidion Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Solidion Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Copa Holdings and Solidion Technology

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

The idea behind Copa Holdings SA and Solidion Technology 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.