Correlation Between Copa Holdings and INGERSOLL
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By analyzing existing cross correlation between Copa Holdings SA and INGERSOLL RAND LUXEMBOURG FIN, you can compare the effects of market volatilities on Copa Holdings and INGERSOLL 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 INGERSOLL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and INGERSOLL.
Diversification Opportunities for Copa Holdings and INGERSOLL
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Copa and INGERSOLL is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and INGERSOLL RAND LUXEMBOURG FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INGERSOLL RAND LUXEM 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 INGERSOLL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INGERSOLL RAND LUXEM has no effect on the direction of Copa Holdings i.e., Copa Holdings and INGERSOLL go up and down completely randomly.
Pair Corralation between Copa Holdings and INGERSOLL
Considering the 90-day investment horizon Copa Holdings SA is expected to generate 0.73 times more return on investment than INGERSOLL. However, Copa Holdings SA is 1.37 times less risky than INGERSOLL. It trades about 0.02 of its potential returns per unit of risk. INGERSOLL RAND LUXEMBOURG FIN is currently generating about 0.01 per unit of risk. If you would invest 7,652 in Copa Holdings SA on September 25, 2024 and sell it today you would earn a total of 1,185 from holding Copa Holdings SA or generate 15.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 27.82% |
Values | Daily Returns |
Copa Holdings SA vs. INGERSOLL RAND LUXEMBOURG FIN
Performance |
Timeline |
Copa Holdings SA |
INGERSOLL RAND LUXEM |
Copa Holdings and INGERSOLL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Copa Holdings and INGERSOLL
The main advantage of trading using opposite Copa Holdings and INGERSOLL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, INGERSOLL 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 INGERSOLL will offset losses from the drop in INGERSOLL's long position.The idea behind Copa Holdings SA and INGERSOLL RAND LUXEMBOURG FIN 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.INGERSOLL vs. Volaris | INGERSOLL vs. Copa Holdings SA | INGERSOLL vs. Allegiant Travel | INGERSOLL vs. Grocery Outlet Holding |
Check out your portfolio center.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.
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