Correlation Between Copa Holdings and Delta Air

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Delta Air 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 Delta Air 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 Delta Air Lines, you can compare the effects of market volatilities on Copa Holdings and Delta Air 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 Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Delta Air.

Diversification Opportunities for Copa Holdings and Delta Air

0.72
  Correlation Coefficient

Poor diversification

The 3 months correlation between Copa and Delta is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines 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 Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of Copa Holdings i.e., Copa Holdings and Delta Air go up and down completely randomly.

Pair Corralation between Copa Holdings and Delta Air

Considering the 90-day investment horizon Copa Holdings is expected to generate 1.82 times less return on investment than Delta Air. But when comparing it to its historical volatility, Copa Holdings SA is 1.08 times less risky than Delta Air. It trades about 0.26 of its potential returns per unit of risk. Delta Air Lines is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest  4,201  in Delta Air Lines on December 30, 2023 and sell it today you would earn a total of  586.00  from holding Delta Air Lines or generate 13.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Copa Holdings SA  vs.  Delta Air Lines

 Performance 
       Timeline  
Copa Holdings SA 

Risk-Adjusted Performance

2 of 100

 
Low
 
High
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Copa Holdings SA are ranked lower than 2 (%) 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.
Delta Air Lines 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Delta Air Lines are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Delta Air disclosed solid returns over the last few months and may actually be approaching a breakup point.

Copa Holdings and Delta Air Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Copa Holdings and Delta Air

The main advantage of trading using opposite Copa Holdings and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Delta Air 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 Delta Air will offset losses from the drop in Delta Air's long position.
The idea behind Copa Holdings SA and Delta Air Lines 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.
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

Other Complementary Tools

Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Global Correlations
Find global opportunities by holding instruments from different markets
Share Portfolio
Track or share privately all of your investments from the convenience of any device
Fundamental Analysis
View fundamental data based on most recent published financial statements
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets