Correlation Between Queen City and Copa Holdings

Can any of the company-specific risk be diversified away by investing in both Queen City and Copa Holdings 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 Queen City and Copa Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Queen City Investments and Copa Holdings SA, you can compare the effects of market volatilities on Queen City and Copa Holdings 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 Queen City with a short position of Copa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Queen City and Copa Holdings.

Diversification Opportunities for Queen City and Copa Holdings

0.0

Correlation Coefficient

Queen City  Copa Holdings

Pay attention - limited upside

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

Pair Corralation between Queen City and Copa Holdings

Given the investment horizon of 90 days Queen City is expected to generate 1.82 times less return on investment than Copa Holdings. In addition to that, Queen City is 1.01 times more volatile than Copa Holdings SA. It trades about 0.03 of its total potential returns per unit of risk. Copa Holdings SA is currently generating about 0.05 per unit of volatility. If you would invest  8,830  in Copa Holdings SA on December 4, 2024 and sell it today you would earn a total of  409.00  from holding Copa Holdings SA or generate 4.63% return on investment over 90 days.

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

Queen City Investments  vs.  Copa Holdings SA

Queen City Investments

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Queen City Investments are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Queen City is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Copa Holdings SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Copa Holdings SA are ranked lower than 4 (%) 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.

Pair Trading with Queen City and Copa Holdings

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

The idea behind Queen City Investments and Copa Holdings SA 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.