Correlation Between Barings BDC and Sun Country
Can any of the company-specific risk be diversified away by investing in both Barings BDC and Sun Country 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 Barings BDC and Sun Country into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings BDC and Sun Country Airlines, you can compare the effects of market volatilities on Barings BDC and Sun Country 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 Barings BDC with a short position of Sun Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and Sun Country.
Diversification Opportunities for Barings BDC and Sun Country
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Barings and Sun is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and Sun Country Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Country Airlines and Barings BDC 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 Barings BDC are associated (or correlated) with Sun Country. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Country Airlines has no effect on the direction of Barings BDC i.e., Barings BDC and Sun Country go up and down completely randomly.
Pair Corralation between Barings BDC and Sun Country
Given the investment horizon of 90 days Barings BDC is expected to generate 23.28 times less return on investment than Sun Country. But when comparing it to its historical volatility, Barings BDC is 3.66 times less risky than Sun Country. It trades about 0.02 of its potential returns per unit of risk. Sun Country Airlines is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,117 in Sun Country Airlines on September 12, 2024 and sell it today you would earn a total of 396.00 from holding Sun Country Airlines or generate 35.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings BDC vs. Sun Country Airlines
Performance |
| Timeline |
| Barings BDC |
| Sun Country Airlines |
Barings BDC and Sun Country Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings BDC and Sun Country
The main advantage of trading using opposite Barings BDC and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, Sun Country 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 Sun Country will offset losses from the drop in Sun Country's long position.| Barings BDC vs. Runway Growth Finance | Barings BDC vs. OneMain Holdings | Barings BDC vs. Navient Corp | Barings BDC vs. Oaktree Specialty Lending |
| Sun Country vs. American Airlines Group | Sun Country vs. Southwest Airlines | Sun Country vs. United Airlines Holdings | Sun Country 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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