Correlation Between Hawaiian Holdings and Copa Holdings
Can any of the company-specific risk be diversified away by investing in both Hawaiian Holdings 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 Hawaiian Holdings and Copa Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Holdings and Copa Holdings SA, you can compare the effects of market volatilities on Hawaiian Holdings 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 Hawaiian Holdings with a short position of Copa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Holdings and Copa Holdings.
Diversification Opportunities for Hawaiian Holdings and Copa Holdings
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hawaiian and Copa is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Holdings 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 Hawaiian 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 Hawaiian Holdings 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 Hawaiian Holdings i.e., Hawaiian Holdings and Copa Holdings go up and down completely randomly.
Pair Corralation between Hawaiian Holdings and Copa Holdings
Allowing for the 90-day total investment horizon Hawaiian Holdings is expected to generate 4.45 times more return on investment than Copa Holdings. However, Hawaiian Holdings is 4.45 times more volatile than Copa Holdings SA. It trades about 0.02 of its potential returns per unit of risk. Copa Holdings SA is currently generating about 0.05 per unit of risk. If you would invest 1,546 in Hawaiian Holdings on January 27, 2024 and sell it today you would lose (334.00) from holding Hawaiian Holdings or give up 21.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawaiian Holdings vs. Copa Holdings SA
Performance |
| Timeline |
| Hawaiian Holdings |
| Copa Holdings SA |
Hawaiian Holdings and Copa Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Holdings and Copa Holdings
The main advantage of trading using opposite Hawaiian Holdings and Copa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Holdings 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.| Hawaiian Holdings vs. Southwest Airlines | Hawaiian Holdings vs. JetBlue Airways Corp | Hawaiian Holdings vs. United Airlines Holdings | Hawaiian Holdings vs. Delta Air Lines |
| Copa Holdings vs. SkyWest | Copa Holdings vs. Sun Country Airlines | Copa Holdings vs. Air Transport Services | Copa Holdings vs. Frontier Group Holdings |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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