Correlation Between Skyline and Onity
Can any of the company-specific risk be diversified away by investing in both Skyline and Onity 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 Skyline and Onity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skyline and Onity Group, you can compare the effects of market volatilities on Skyline and Onity 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 Skyline with a short position of Onity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skyline and Onity.
Diversification Opportunities for Skyline and Onity
Very weak diversification
The 3 months correlation between Skyline and Onity is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Skyline and Onity Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onity Group and Skyline 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 Skyline are associated (or correlated) with Onity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onity Group has no effect on the direction of Skyline i.e., Skyline and Onity go up and down completely randomly.
Pair Corralation between Skyline and Onity
Considering the 90-day investment horizon Skyline is expected to generate 1.35 times more return on investment than Onity. However, Skyline is 1.35 times more volatile than Onity Group. It trades about 0.52 of its potential returns per unit of risk. Onity Group is currently generating about 0.14 per unit of risk. If you would invest 9,092 in Skyline on September 5, 2024 and sell it today you would earn a total of 1,400 from holding Skyline or generate 15.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skyline vs. Onity Group
Performance |
| Timeline |
| Skyline |
| Onity Group |
Skyline and Onity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skyline and Onity
The main advantage of trading using opposite Skyline and Onity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skyline position performs unexpectedly, Onity 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 Onity will offset losses from the drop in Onity's long position.| Skyline vs. Api Group Corp | Skyline vs. MYR Group | Skyline vs. Comfort Systems USA | Skyline vs. Arcosa Inc |
| Onity vs. Sonida Senior Living | Onity vs. Valneva SE ADR | Onity vs. Arrow Electronics | Onity vs. Franklin Credit Management |
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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