Correlation Between YETI Holdings and Six Flags

Can any of the company-specific risk be diversified away by investing in both YETI Holdings and Six Flags 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 YETI Holdings and Six Flags into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between YETI Holdings and Six Flags Entertainment, you can compare the effects of market volatilities on YETI Holdings and Six Flags 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 YETI Holdings with a short position of Six Flags. Check out your portfolio center. Please also check ongoing floating volatility patterns of YETI Holdings and Six Flags.

Diversification Opportunities for YETI Holdings and Six Flags

0.86

Correlation Coefficient

YETI Holdings  Six Flags

Very poor diversification

The 3 months correlation between YETI and Six is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding YETI Holdings and Six Flags Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Flags Entertainment and YETI Holdings 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 YETI Holdings are associated (or correlated) with Six Flags. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Flags Entertainment has no effect on the direction of YETI Holdings i.e., YETI Holdings and Six Flags go up and down completely randomly.

Pair Corralation between YETI Holdings and Six Flags

Given the investment horizon of 90 days YETI Holdings is expected to generate 0.7 times more return on investment than Six Flags. However, YETI Holdings is 1.43 times less risky than Six Flags. It trades about -0.12 of its potential returns per unit of risk. Six Flags Entertainment is currently generating about -0.15 per unit of risk. If you would invest  3,938  in YETI Holdings on December 26, 2024 and sell it today you would lose (552.00) from holding YETI Holdings or give up 14.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

YETI Holdings  vs.  Six Flags Entertainment

YETI Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days YETI Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Six Flags Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Six Flags Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with YETI Holdings and Six Flags

The main advantage of trading using opposite YETI Holdings and Six Flags positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YETI Holdings position performs unexpectedly, Six Flags 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 Six Flags will offset losses from the drop in Six Flags' long position.

The idea behind YETI Holdings and Six Flags Entertainment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.