Correlation Between ECHO INVESTMENT and Copa Holdings

Can any of the company-specific risk be diversified away by investing in both ECHO INVESTMENT 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 ECHO INVESTMENT and Copa Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ECHO INVESTMENT ZY and Copa Holdings SA, you can compare the effects of market volatilities on ECHO INVESTMENT 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 ECHO INVESTMENT with a short position of Copa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECHO INVESTMENT and Copa Holdings.

Diversification Opportunities for ECHO INVESTMENT and Copa Holdings

0.41

Correlation Coefficient

ECHO INVESTMENT  Copa Holdings

Very weak diversification

The 3 months correlation between ECHO and Copa is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding ECHO INVESTMENT ZY 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 ECHO INVESTMENT 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 ECHO INVESTMENT ZY 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 ECHO INVESTMENT i.e., ECHO INVESTMENT and Copa Holdings go up and down completely randomly.

Pair Corralation between ECHO INVESTMENT and Copa Holdings

Assuming the 90 days horizon ECHO INVESTMENT is expected to generate 1.98 times less return on investment than Copa Holdings. In addition to that, ECHO INVESTMENT is 1.03 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 0.2 per unit of volatility. If you would invest  7,537  in Copa Holdings SA on April 23, 2025 and sell it today you would earn a total of  1,663  from holding Copa Holdings SA or generate 22.06% return on investment over 90 days.

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

ECHO INVESTMENT ZY  vs.  Copa Holdings SA

ECHO INVESTMENT ZY

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ECHO INVESTMENT ZY are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ECHO INVESTMENT may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Copa Holdings SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Copa Holdings SA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Copa Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ECHO INVESTMENT and Copa Holdings

The main advantage of trading using opposite ECHO INVESTMENT and Copa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECHO INVESTMENT 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.

The idea behind ECHO INVESTMENT ZY and Copa Holdings SA 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.