Correlation Between SkyWest and Worthington Steel
Can any of the company-specific risk be diversified away by investing in both SkyWest and Worthington Steel 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 Worthington Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SkyWest and Worthington Steel, you can compare the effects of market volatilities on SkyWest and Worthington Steel 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 Worthington Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SkyWest and Worthington Steel.
Diversification Opportunities for SkyWest and Worthington Steel
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SkyWest and Worthington is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding SkyWest and Worthington Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worthington Steel 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 Worthington Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worthington Steel has no effect on the direction of SkyWest i.e., SkyWest and Worthington Steel go up and down completely randomly.
Pair Corralation between SkyWest and Worthington Steel
Given the investment horizon of 90 days SkyWest is expected to generate 0.69 times more return on investment than Worthington Steel. However, SkyWest is 1.45 times less risky than Worthington Steel. It trades about 0.16 of its potential returns per unit of risk. Worthington Steel is currently generating about 0.08 per unit of risk. If you would invest 1,817 in SkyWest on August 30, 2024 and sell it today you would earn a total of 9,579 from holding SkyWest or generate 527.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 51.31% |
| Values | Daily Returns |
SkyWest vs. Worthington Steel
Performance |
| Timeline |
| SkyWest |
| Worthington Steel |
SkyWest and Worthington Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SkyWest and Worthington Steel
The main advantage of trading using opposite SkyWest and Worthington Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SkyWest position performs unexpectedly, Worthington Steel 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 Worthington Steel will offset losses from the drop in Worthington Steel's long position.| SkyWest vs. Copa Holdings SA | SkyWest vs. Sun Country Airlines | SkyWest vs. Air Transport Services | SkyWest vs. Frontier Group Holdings |
| Worthington Steel vs. Sonida Senior Living | Worthington Steel vs. Vishay Intertechnology | Worthington Steel vs. HUTCHMED DRC | Worthington Steel vs. Teleflex Incorporated |
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 Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Commodity Directory Find actively traded commodities issued by global exchanges |