Correlation Between Everest and Sun Country
Can any of the company-specific risk be diversified away by investing in both Everest 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 Everest and Sun Country into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Everest Group and Sun Country Airlines, you can compare the effects of market volatilities on Everest 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 Everest with a short position of Sun Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everest and Sun Country.
Diversification Opportunities for Everest and Sun Country
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Everest and Sun is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Everest Group 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 Everest 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 Everest Group 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 Everest i.e., Everest and Sun Country go up and down completely randomly.
Pair Corralation between Everest and Sun Country
Allowing for the 90-day total investment horizon Everest Group is expected to generate 0.44 times more return on investment than Sun Country. However, Everest Group is 2.27 times less risky than Sun Country. It trades about 0.39 of its potential returns per unit of risk. Sun Country Airlines is currently generating about -0.04 per unit of risk. If you would invest 34,775 in Everest Group on September 4, 2024 and sell it today you would earn a total of 3,598 from holding Everest Group or generate 10.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Everest Group vs. Sun Country Airlines
Performance |
| Timeline |
| Everest Group |
| Sun Country Airlines |
Everest and Sun Country Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Everest and Sun Country
The main advantage of trading using opposite Everest and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everest 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.| Everest vs. Abcellera Biologics | Everest vs. Centessa Pharmaceuticals PLC | Everest vs. Tscan Therapeutics | Everest vs. Sellas Life Sciences |
| Sun Country vs. JetBlue Airways Corp | Sun Country vs. Allegiant Travel | Sun Country vs. Copa Holdings SA | Sun Country vs. SkyWest |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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