Correlation Between Zeo Energy and Copa Holdings

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

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

Diversification Opportunities for Zeo Energy and Copa Holdings

-0.51

Correlation Coefficient

Zeo Energy  Copa Holdings

Excellent diversification

The 3 months correlation between Zeo and Copa is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Zeo Energy Corp 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 Zeo Energy 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 Zeo Energy Corp 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 Zeo Energy i.e., Zeo Energy and Copa Holdings go up and down completely randomly.

Pair Corralation between Zeo Energy and Copa Holdings

Considering the 90-day investment horizon Zeo Energy Corp is expected to generate 5.56 times more return on investment than Copa Holdings. However, Zeo Energy is 5.56 times more volatile than Copa Holdings SA. It trades about 0.0 of its potential returns per unit of risk. Copa Holdings SA is currently generating about -0.02 per unit of risk. If you would invest  1,088  in Zeo Energy Corp on September 12, 2024 and sell it today you would lose (813.00) from holding Zeo Energy Corp or give up 74.72% of portfolio value over 90 days.

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

Zeo Energy Corp  vs.  Copa Holdings SA

Zeo Energy Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zeo Energy Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Zeo Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Copa Holdings SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Copa Holdings SA are ranked lower than 1 (%) 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 newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Zeo Energy and Copa Holdings

The main advantage of trading using opposite Zeo Energy and Copa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zeo Energy 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 Zeo Energy Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.