Correlation Between Inflection Point and SkyWest
Can any of the company-specific risk be diversified away by investing in both Inflection Point and SkyWest 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 Inflection Point and SkyWest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflection Point Acquisition and SkyWest, you can compare the effects of market volatilities on Inflection Point and SkyWest 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 Inflection Point with a short position of SkyWest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflection Point and SkyWest.
Diversification Opportunities for Inflection Point and SkyWest
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Inflection and SkyWest is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and SkyWest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SkyWest and Inflection Point 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 Inflection Point Acquisition are associated (or correlated) with SkyWest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SkyWest has no effect on the direction of Inflection Point i.e., Inflection Point and SkyWest go up and down completely randomly.
Pair Corralation between Inflection Point and SkyWest
Assuming the 90 days horizon Inflection Point is expected to generate 14.32 times less return on investment than SkyWest. But when comparing it to its historical volatility, Inflection Point Acquisition is 9.63 times less risky than SkyWest. It trades about 0.12 of its potential returns per unit of risk. SkyWest is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 5,164 in SkyWest on September 3, 2024 and sell it today you would earn a total of 6,310 from holding SkyWest or generate 122.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inflection Point Acquisition vs. SkyWest
Performance |
| Timeline |
| Inflection Point Acq |
| SkyWest |
Inflection Point and SkyWest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflection Point and SkyWest
The main advantage of trading using opposite Inflection Point and SkyWest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point position performs unexpectedly, SkyWest 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 SkyWest will offset losses from the drop in SkyWest's long position.| Inflection Point vs. Arrow Electronics | Inflection Point vs. BioNTech SE | Inflection Point vs. BJs Restaurants | Inflection Point vs. Yum Brands |
| SkyWest vs. Copa Holdings SA | SkyWest vs. Sun Country Airlines | SkyWest vs. Air Transport Services | SkyWest vs. Frontier Group Holdings |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Stocks Directory Find actively traded stocks across global markets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |