Correlation Between Surf Air and SkyWest
Can any of the company-specific risk be diversified away by investing in both Surf Air and SkyWest 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 Surf Air and SkyWest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surf Air Mobility and SkyWest, you can compare the effects of market volatilities on Surf Air and SkyWest 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 Surf Air with a short position of SkyWest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surf Air and SkyWest.
Diversification Opportunities for Surf Air and SkyWest
Pay attention - limited upside
The 3 months correlation between Surf and SkyWest is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Surf Air Mobility and SkyWest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SkyWest and Surf Air 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 Surf Air Mobility are associated (or correlated) with SkyWest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SkyWest has no effect on the direction of Surf Air i.e., Surf Air and SkyWest go up and down completely randomly.
Pair Corralation between Surf Air and SkyWest
Given the investment horizon of 90 days Surf Air Mobility is expected to under-perform the SkyWest. In addition to that, Surf Air is 4.6 times more volatile than SkyWest. It trades about -0.29 of its total potential returns per unit of risk. SkyWest is currently generating about 0.18 per unit of volatility. If you would invest 6,906 in SkyWest on February 3, 2024 and sell it today you would earn a total of 592.00 from holding SkyWest or generate 8.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Surf Air Mobility vs. SkyWest
Performance |
Timeline |
Surf Air Mobility |
SkyWest |
Surf Air and SkyWest Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Surf Air and SkyWest
The main advantage of trading using opposite Surf Air and SkyWest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surf Air position performs unexpectedly, SkyWest 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 SkyWest will offset losses from the drop in SkyWest's long position.Surf Air vs. California Water Service | Surf Air vs. Black Hills | Surf Air vs. Enersys | Surf Air vs. Nextera Energy |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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