Correlation Between Copa Holdings and CSX
Can any of the company-specific risk be diversified away by investing in both Copa Holdings and CSX 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 CSX 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 CSX Corporation, you can compare the effects of market volatilities on Copa Holdings and CSX 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 CSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and CSX.
Diversification Opportunities for Copa Holdings and CSX
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Copa and CSX is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and CSX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSX Corporation 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 CSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSX Corporation has no effect on the direction of Copa Holdings i.e., Copa Holdings and CSX go up and down completely randomly.
Pair Corralation between Copa Holdings and CSX
Considering the 90-day investment horizon Copa Holdings SA is expected to generate 1.1 times more return on investment than CSX. However, Copa Holdings is 1.1 times more volatile than CSX Corporation. It trades about 0.09 of its potential returns per unit of risk. CSX Corporation is currently generating about 0.07 per unit of risk. If you would invest 9,407 in Copa Holdings SA on March 19, 2025 and sell it today you would earn a total of 956.00 from holding Copa Holdings SA or generate 10.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copa Holdings SA vs. CSX Corp.
Performance |
| Timeline |
| Copa Holdings SA |
| CSX Corporation |
Copa Holdings and CSX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and CSX
The main advantage of trading using opposite Copa Holdings and CSX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, CSX 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 CSX will offset losses from the drop in CSX's long position.| Copa Holdings vs. SkyWest | Copa Holdings vs. Sun Country Airlines | Copa Holdings vs. Frontier Group Holdings | Copa Holdings vs. Southwest Airlines |
| CSX vs. Union Pacific | CSX vs. Canadian National Railway | CSX vs. Canadian Pacific Railway | CSX vs. Westinghouse Air Brake |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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