Correlation Between Sky Harbour and Cepton
Can any of the company-specific risk be diversified away by investing in both Sky Harbour and Cepton 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 Sky Harbour and Cepton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sky Harbour Group and Cepton Inc, you can compare the effects of market volatilities on Sky Harbour and Cepton 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 Sky Harbour with a short position of Cepton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sky Harbour and Cepton.
Diversification Opportunities for Sky Harbour and Cepton
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sky and Cepton is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sky Harbour Group and Cepton Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cepton Inc and Sky Harbour 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 Sky Harbour Group are associated (or correlated) with Cepton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cepton Inc has no effect on the direction of Sky Harbour i.e., Sky Harbour and Cepton go up and down completely randomly.
Pair Corralation between Sky Harbour and Cepton
Given the investment horizon of 90 days Sky Harbour is expected to generate 1.89 times less return on investment than Cepton. But when comparing it to its historical volatility, Sky Harbour Group is 3.7 times less risky than Cepton. It trades about 0.08 of its potential returns per unit of risk. Cepton Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Cepton Inc on August 31, 2024 and sell it today you would lose (10.26) from holding Cepton Inc or give up 93.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.76% |
| Values | Daily Returns |
Sky Harbour Group vs. Cepton Inc
Performance |
| Timeline |
| Sky Harbour Group |
| Cepton Inc |
Sky Harbour and Cepton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sky Harbour and Cepton
The main advantage of trading using opposite Sky Harbour and Cepton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sky Harbour position performs unexpectedly, Cepton 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 Cepton will offset losses from the drop in Cepton's long position.| Sky Harbour vs. Ducommun Incorporated | Sky Harbour vs. Innovative Solutions and | Sky Harbour vs. National Presto Industries | Sky Harbour vs. Astronics |
| Cepton vs. Cepton Inc | Cepton vs. Thayer Ventures Acquisition | Cepton vs. Anghami Warrants | Cepton vs. Inspirato |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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