Correlation Between SkyWest and First Ship
Can any of the company-specific risk be diversified away by investing in both SkyWest and First Ship 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 First Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SkyWest and First Ship Lease, you can compare the effects of market volatilities on SkyWest and First Ship 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 First Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of SkyWest and First Ship.
Diversification Opportunities for SkyWest and First Ship
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SkyWest and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SkyWest and First Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Ship Lease 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 First Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Ship Lease has no effect on the direction of SkyWest i.e., SkyWest and First Ship go up and down completely randomly.
Pair Corralation between SkyWest and First Ship
Given the investment horizon of 90 days SkyWest is expected to generate 0.57 times more return on investment than First Ship. However, SkyWest is 1.76 times less risky than First Ship. It trades about 0.16 of its potential returns per unit of risk. First Ship Lease is currently generating about 0.06 per unit of risk. If you would invest 4,736 in SkyWest on September 14, 2024 and sell it today you would earn a total of 5,924 from holding SkyWest or generate 125.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SkyWest vs. First Ship Lease
Performance |
| Timeline |
| SkyWest |
| First Ship Lease |
SkyWest and First Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SkyWest and First Ship
The main advantage of trading using opposite SkyWest and First Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SkyWest position performs unexpectedly, First Ship 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 First Ship will offset losses from the drop in First Ship's long position.| SkyWest vs. Southwest Airlines | SkyWest vs. United Airlines Holdings | SkyWest vs. Frontier Group Holdings |
| First Ship vs. Westrock Coffee | First Ship vs. Constellation Brands Class | First Ship vs. SkyWest | First Ship vs. The Coca Cola |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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