Correlation Between SkyWest and Beyond Meat
Can any of the company-specific risk be diversified away by investing in both SkyWest and Beyond Meat 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 Beyond Meat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SkyWest and Beyond Meat, you can compare the effects of market volatilities on SkyWest and Beyond Meat 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 Beyond Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of SkyWest and Beyond Meat.
Diversification Opportunities for SkyWest and Beyond Meat
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SkyWest and Beyond is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding SkyWest and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat 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 Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of SkyWest i.e., SkyWest and Beyond Meat go up and down completely randomly.
Pair Corralation between SkyWest and Beyond Meat
Given the investment horizon of 90 days SkyWest is expected to generate 0.59 times more return on investment than Beyond Meat. However, SkyWest is 1.69 times less risky than Beyond Meat. It trades about 0.35 of its potential returns per unit of risk. Beyond Meat is currently generating about -0.19 per unit of risk. If you would invest 9,520 in SkyWest on September 1, 2024 and sell it today you would earn a total of 1,954 from holding SkyWest or generate 20.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SkyWest vs. Beyond Meat
Performance |
| Timeline |
| SkyWest |
| Beyond Meat |
SkyWest and Beyond Meat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SkyWest and Beyond Meat
The main advantage of trading using opposite SkyWest and Beyond Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SkyWest position performs unexpectedly, Beyond Meat 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 Beyond Meat will offset losses from the drop in Beyond Meat's long position.| SkyWest vs. Canadian Pacific Railway | SkyWest vs. Volaris | SkyWest vs. Werner Enterprises | SkyWest vs. Canadian National Railway |
| Beyond Meat vs. Kraft Heinz Co | Beyond Meat vs. Hormel Foods | Beyond Meat vs. Kellanova | Beyond Meat vs. General Mills |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |