Correlation Between Skechers USA and SkyWest
Can any of the company-specific risk be diversified away by investing in both Skechers USA 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 Skechers USA and SkyWest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and SkyWest, you can compare the effects of market volatilities on Skechers USA 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 Skechers USA with a short position of SkyWest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and SkyWest.
Diversification Opportunities for Skechers USA and SkyWest
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Skechers and SkyWest is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and SkyWest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SkyWest and Skechers USA 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 Skechers USA 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 Skechers USA i.e., Skechers USA and SkyWest go up and down completely randomly.
Pair Corralation between Skechers USA and SkyWest
Considering the 90-day investment horizon Skechers USA is expected to generate 1.11 times more return on investment than SkyWest. However, Skechers USA is 1.11 times more volatile than SkyWest. It trades about 0.41 of its potential returns per unit of risk. SkyWest is currently generating about -0.12 per unit of risk. If you would invest 6,101 in Skechers USA on September 12, 2024 and sell it today you would earn a total of 986.00 from holding Skechers USA or generate 16.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skechers USA vs. SkyWest
Performance |
| Timeline |
| Skechers USA |
| SkyWest |
Skechers USA and SkyWest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and SkyWest
The main advantage of trading using opposite Skechers USA and SkyWest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA 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.| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands |
| SkyWest vs. Volaris | SkyWest vs. flyExclusive, | SkyWest vs. Alaska Air Group | SkyWest vs. Copa Holdings SA |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |