Correlation Between SkyWest and Cimpress
Can any of the company-specific risk be diversified away by investing in both SkyWest and Cimpress 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 Cimpress into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SkyWest and Cimpress NV, you can compare the effects of market volatilities on SkyWest and Cimpress 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 Cimpress. Check out your portfolio center. Please also check ongoing floating volatility patterns of SkyWest and Cimpress.
Diversification Opportunities for SkyWest and Cimpress
Weak diversification
The 3 months correlation between SkyWest and Cimpress is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SkyWest and Cimpress NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimpress NV 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 Cimpress. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cimpress NV has no effect on the direction of SkyWest i.e., SkyWest and Cimpress go up and down completely randomly.
Pair Corralation between SkyWest and Cimpress
Given the investment horizon of 90 days SkyWest is expected to generate 1.14 times more return on investment than Cimpress. However, SkyWest is 1.14 times more volatile than Cimpress NV. It trades about 0.31 of its potential returns per unit of risk. Cimpress NV is currently generating about -0.04 per unit of risk. If you would invest 10,333 in SkyWest on October 25, 2024 and sell it today you would earn a total of 1,273 from holding SkyWest or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SkyWest vs. Cimpress NV
Performance |
| Timeline |
| SkyWest |
| Cimpress NV |
SkyWest and Cimpress Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SkyWest and Cimpress
The main advantage of trading using opposite SkyWest and Cimpress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SkyWest position performs unexpectedly, Cimpress 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 Cimpress will offset losses from the drop in Cimpress' long position.| SkyWest vs. Copa Holdings SA | SkyWest vs. Sun Country Airlines | SkyWest vs. Air Transport Services | SkyWest vs. Frontier Group Holdings |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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