Correlation Between SkyWest and Air France
Can any of the company-specific risk be diversified away by investing in both SkyWest and Air France 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 SkyWest and Air France into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SkyWest and Air France KLM, you can compare the effects of market volatilities on SkyWest and Air France 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 SkyWest with a short position of Air France. Check out your portfolio center. Please also check ongoing floating volatility patterns of SkyWest and Air France.
Diversification Opportunities for SkyWest and Air France
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SkyWest and Air is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding SkyWest and Air France KLM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air France KLM and SkyWest 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 SkyWest are associated (or correlated) with Air France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air France KLM has no effect on the direction of SkyWest i.e., SkyWest and Air France go up and down completely randomly.
Pair Corralation between SkyWest and Air France
Given the investment horizon of 90 days SkyWest is expected to generate 1.1 times less return on investment than Air France. In addition to that, SkyWest is 1.02 times more volatile than Air France KLM. It trades about 0.12 of its total potential returns per unit of risk. Air France KLM is currently generating about 0.14 per unit of volatility. If you would invest 78.00 in Air France KLM on November 9, 2024 and sell it today you would earn a total of 4.00 from holding Air France KLM or generate 5.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SkyWest vs. Air France KLM
Performance |
| Timeline |
| SkyWest |
| Air France KLM |
SkyWest and Air France Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SkyWest and Air France
The main advantage of trading using opposite SkyWest and Air France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SkyWest position performs unexpectedly, Air France 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 Air France will offset losses from the drop in Air France's long position.| SkyWest vs. Copa Holdings SA | SkyWest vs. Sun Country Airlines | SkyWest vs. Air Transport Services | SkyWest vs. Frontier Group Holdings |
| Air France vs. International Consolidated Airlines | Air France vs. Air France KLM SA | Air France vs. Finnair Oyj | Air France vs. AirAsia Group Berhad |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |