Correlation Between Copa Holdings and Graphjet Technology

Can any of the company-specific risk be diversified away by investing in both Copa Holdings and Graphjet Technology 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 Graphjet Technology 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 Graphjet Technology, you can compare the effects of market volatilities on Copa Holdings and Graphjet Technology 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 Graphjet Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Graphjet Technology.

Diversification Opportunities for Copa Holdings and Graphjet Technology

-0.24

Correlation Coefficient

Copa Holdings  Graphjet Technology

Very good diversification

The 3 months correlation between Copa and Graphjet is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Graphjet Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphjet Technology 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 Graphjet Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphjet Technology has no effect on the direction of Copa Holdings i.e., Copa Holdings and Graphjet Technology go up and down completely randomly.

Pair Corralation between Copa Holdings and Graphjet Technology

Considering the 90-day investment horizon Copa Holdings is expected to generate 4.72 times less return on investment than Graphjet Technology. But when comparing it to its historical volatility, Copa Holdings SA is 9.53 times less risky than Graphjet Technology. It trades about 0.19 of its potential returns per unit of risk. Graphjet Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Graphjet Technology on May 2, 2025 and sell it today you would earn a total of  3.00  from holding Graphjet Technology or generate 27.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Copa Holdings SA  vs.  Graphjet Technology

Copa Holdings SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Copa Holdings SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Copa Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Graphjet Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Graphjet Technology are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Graphjet Technology demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Copa Holdings and Graphjet Technology

The main advantage of trading using opposite Copa Holdings and Graphjet Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings position performs unexpectedly, Graphjet Technology 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 Graphjet Technology will offset losses from the drop in Graphjet Technology's long position.

The idea behind Copa Holdings SA and Graphjet Technology 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.