Correlation Between Precision Optics, and Copa Holdings
Can any of the company-specific risk be diversified away by investing in both Precision Optics, 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 Precision Optics, and Copa Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precision Optics, and Copa Holdings SA, you can compare the effects of market volatilities on Precision Optics, 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 Precision Optics, with a short position of Copa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precision Optics, and Copa Holdings.
Diversification Opportunities for Precision Optics, and Copa Holdings
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Precision and Copa is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Precision Optics, 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 Precision Optics, 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 Precision Optics, 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 Precision Optics, i.e., Precision Optics, and Copa Holdings go up and down completely randomly.
Pair Corralation between Precision Optics, and Copa Holdings
Given the investment horizon of 90 days Precision Optics, is expected to generate 1.16 times less return on investment than Copa Holdings. In addition to that, Precision Optics, is 2.07 times more volatile than Copa Holdings SA. It trades about 0.1 of its total potential returns per unit of risk. Copa Holdings SA is currently generating about 0.23 per unit of volatility. If you would invest 8,883 in Copa Holdings SA on April 24, 2025 and sell it today you would earn a total of 2,151 from holding Copa Holdings SA or generate 24.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Precision Optics, vs. Copa Holdings SA
Performance |
| Timeline |
| Precision Optics, |
| Copa Holdings SA |
Precision Optics, and Copa Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precision Optics, and Copa Holdings
The main advantage of trading using opposite Precision Optics, and Copa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precision Optics, 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.| Precision Optics, vs. Repro Med Systems | Precision Optics, vs. InfuSystems Holdings | Precision Optics, vs. Utah Medical Products | Precision Optics, vs. Milestone Scientific |
| Copa Holdings vs. Allegiant Travel | Copa Holdings vs. Alaska Air Group | Copa Holdings vs. International Consolidated Airlines | Copa Holdings vs. Ryanair Holdings PLC |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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