Correlation Between SkyWest and Lithium One
Can any of the company-specific risk be diversified away by investing in both SkyWest and Lithium One 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 Lithium One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SkyWest and Lithium One Metals, you can compare the effects of market volatilities on SkyWest and Lithium One 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 Lithium One. Check out your portfolio center. Please also check ongoing floating volatility patterns of SkyWest and Lithium One.
Diversification Opportunities for SkyWest and Lithium One
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SkyWest and Lithium is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding SkyWest and Lithium One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium One Metals 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 Lithium One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium One Metals has no effect on the direction of SkyWest i.e., SkyWest and Lithium One go up and down completely randomly.
Pair Corralation between SkyWest and Lithium One
Given the investment horizon of 90 days SkyWest is expected to generate 3.42 times less return on investment than Lithium One. But when comparing it to its historical volatility, SkyWest is 8.68 times less risky than Lithium One. It trades about 0.13 of its potential returns per unit of risk. Lithium One Metals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Lithium One Metals on September 3, 2024 and sell it today you would lose (1.57) from holding Lithium One Metals or give up 62.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SkyWest vs. Lithium One Metals
Performance |
| Timeline |
| SkyWest |
| Lithium One Metals |
SkyWest and Lithium One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SkyWest and Lithium One
The main advantage of trading using opposite SkyWest and Lithium One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SkyWest position performs unexpectedly, Lithium One 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 Lithium One will offset losses from the drop in Lithium One's long position.| SkyWest vs. Copa Holdings SA | SkyWest vs. Sun Country Airlines | SkyWest vs. Air Transport Services | SkyWest vs. Frontier Group Holdings |
| Lithium One vs. Legacy Education | Lithium One vs. Apple Inc | Lithium One vs. NVIDIA | Lithium One vs. Microsoft |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |