Correlation Between SkyWest and Bakkt Holdings
Can any of the company-specific risk be diversified away by investing in both SkyWest and Bakkt Holdings 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 Bakkt Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SkyWest and Bakkt Holdings Warrant, you can compare the effects of market volatilities on SkyWest and Bakkt Holdings 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 Bakkt Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SkyWest and Bakkt Holdings.
Diversification Opportunities for SkyWest and Bakkt Holdings
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between SkyWest and Bakkt is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding SkyWest and Bakkt Holdings Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bakkt Holdings Warrant 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 Bakkt Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bakkt Holdings Warrant has no effect on the direction of SkyWest i.e., SkyWest and Bakkt Holdings go up and down completely randomly.
Pair Corralation between SkyWest and Bakkt Holdings
Given the investment horizon of 90 days SkyWest is expected to generate 13.36 times less return on investment than Bakkt Holdings. But when comparing it to its historical volatility, SkyWest is 10.55 times less risky than Bakkt Holdings. It trades about 0.06 of its potential returns per unit of risk. Bakkt Holdings Warrant is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 8.02 in Bakkt Holdings Warrant on December 5, 2024 and sell it today you would earn a total of 13.98 from holding Bakkt Holdings Warrant or generate 174.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.15% |
Values | Daily Returns |
SkyWest vs. Bakkt Holdings Warrant
Performance |
Timeline |
SkyWest |
Bakkt Holdings Warrant |
SkyWest and Bakkt Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SkyWest and Bakkt Holdings
The main advantage of trading using opposite SkyWest and Bakkt Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SkyWest position performs unexpectedly, Bakkt Holdings 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 Bakkt Holdings will offset losses from the drop in Bakkt Holdings' 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories |