Correlation Between SkyWest and Figs
Can any of the company-specific risk be diversified away by investing in both SkyWest and Figs 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 Figs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SkyWest and Figs Inc, you can compare the effects of market volatilities on SkyWest and Figs 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 Figs. Check out your portfolio center. Please also check ongoing floating volatility patterns of SkyWest and Figs.
Diversification Opportunities for SkyWest and Figs
Very good diversification
The 3 months correlation between SkyWest and Figs is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding SkyWest and Figs Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figs Inc 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 Figs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figs Inc has no effect on the direction of SkyWest i.e., SkyWest and Figs go up and down completely randomly.
Pair Corralation between SkyWest and Figs
Given the investment horizon of 90 days SkyWest is expected to generate 0.59 times more return on investment than Figs. However, SkyWest is 1.7 times less risky than Figs. It trades about 0.15 of its potential returns per unit of risk. Figs Inc is currently generating about -0.01 per unit of risk. If you would invest 3,405 in SkyWest on August 31, 2024 and sell it today you would earn a total of 8,069 from holding SkyWest or generate 236.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SkyWest vs. Figs Inc
Performance |
| Timeline |
| SkyWest |
| Figs Inc |
SkyWest and Figs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SkyWest and Figs
The main advantage of trading using opposite SkyWest and Figs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SkyWest position performs unexpectedly, Figs 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 Figs will offset losses from the drop in Figs' long position.| SkyWest vs. Copa Holdings SA | SkyWest vs. Sun Country Airlines | SkyWest vs. Air Transport Services | SkyWest vs. Frontier Group Holdings |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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