Correlation Between Gol Linhas and Copa Holdings
Can any of the company-specific risk be diversified away by investing in both Gol Linhas 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 Gol Linhas and Copa Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gol Linhas Aereas and Copa Holdings SA, you can compare the effects of market volatilities on Gol Linhas 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 Gol Linhas with a short position of Copa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gol Linhas and Copa Holdings.
Diversification Opportunities for Gol Linhas and Copa Holdings
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gol and Copa is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Gol Linhas Aereas 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 Gol Linhas 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 Gol Linhas Aereas 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 Gol Linhas i.e., Gol Linhas and Copa Holdings go up and down completely randomly.
Pair Corralation between Gol Linhas and Copa Holdings
If you would invest 108.00 in Gol Linhas Aereas on January 27, 2024 and sell it today you would earn a total of 0.00 from holding Gol Linhas Aereas or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 4.76% |
Values | Daily Returns |
Gol Linhas Aereas vs. Copa Holdings SA
Performance |
Timeline |
Gol Linhas Aereas |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Copa Holdings SA |
Gol Linhas and Copa Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gol Linhas and Copa Holdings
The main advantage of trading using opposite Gol Linhas and Copa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gol Linhas 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.Gol Linhas vs. Azul SA | Gol Linhas vs. Air France KLM | Gol Linhas vs. Copa Holdings SA | Gol Linhas vs. International Consolidated Airlines |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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