Correlation Between Skyworks Solutions and Biglari Holdings

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

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

Diversification Opportunities for Skyworks Solutions and Biglari Holdings

0.59

Correlation Coefficient

Skyworks Solutions  Biglari Holdings

Very weak diversification

The 3 months correlation between Skyworks and Biglari is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Skyworks Solutions and Biglari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biglari Holdings and Skyworks Solutions 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 Skyworks Solutions are associated (or correlated) with Biglari Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biglari Holdings has no effect on the direction of Skyworks Solutions i.e., Skyworks Solutions and Biglari Holdings go up and down completely randomly.

Pair Corralation between Skyworks Solutions and Biglari Holdings

Given the investment horizon of 90 days Skyworks Solutions is expected to generate 6.48 times less return on investment than Biglari Holdings. But when comparing it to its historical volatility, Skyworks Solutions is 1.11 times less risky than Biglari Holdings. It trades about 0.03 of its potential returns per unit of risk. Biglari Holdings is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  23,711  in Biglari Holdings on May 7, 2025 and sell it today you would earn a total of  5,712  from holding Biglari Holdings or generate 24.09% return on investment over 90 days.

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

Skyworks Solutions  vs.  Biglari Holdings

Skyworks Solutions

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Skyworks Solutions are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward-looking signals, Skyworks Solutions is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Biglari Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Biglari Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Biglari Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Skyworks Solutions and Biglari Holdings

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

The idea behind Skyworks Solutions and Biglari Holdings 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.