Correlation Between Copa Holdings and Hawaiian Holdings
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Hawaiian 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 Copa Holdings and Hawaiian Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Copa Holdings SA and Hawaiian Holdings, you can compare the effects of market volatilities on Copa Holdings and Hawaiian 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 Copa Holdings with a short position of Hawaiian Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Hawaiian Holdings.
Diversification Opportunities for Copa Holdings and Hawaiian Holdings
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Copa and Hawaiian is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Hawaiian Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Holdings 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 Hawaiian Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawaiian Holdings has no effect on the direction of Copa Holdings i.e., Copa Holdings and Hawaiian Holdings go up and down completely randomly.
Pair Corralation between Copa Holdings and Hawaiian Holdings
Considering the 90-day investment horizon Copa Holdings is expected to generate 1.84 times less return on investment than Hawaiian Holdings. But when comparing it to its historical volatility, Copa Holdings SA is 4.43 times less risky than Hawaiian Holdings. It trades about 0.05 of its potential returns per unit of risk. Hawaiian Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,635 in Hawaiian Holdings on January 26, 2024 and sell it today you would lose (393.00) from holding Hawaiian Holdings or give up 24.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copa Holdings SA vs. Hawaiian Holdings
Performance |
| Timeline |
| Copa Holdings SA |
| Hawaiian Holdings |
Copa Holdings and Hawaiian Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Hawaiian Holdings
The main advantage of trading using opposite Copa Holdings and Hawaiian Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Hawaiian 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 Hawaiian Holdings will offset losses from the drop in Hawaiian Holdings' long position.| Copa Holdings vs. SkyWest | Copa Holdings vs. Sun Country Airlines | Copa Holdings vs. Air Transport Services | Copa Holdings vs. Frontier Group Holdings |
| Hawaiian Holdings vs. Southwest Airlines | Hawaiian Holdings vs. JetBlue Airways Corp | Hawaiian Holdings vs. United Airlines Holdings | Hawaiian Holdings vs. Delta Air Lines |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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