Correlation Between KNOT Offshore and Sun Country
Can any of the company-specific risk be diversified away by investing in both KNOT Offshore 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 KNOT Offshore and Sun Country into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KNOT Offshore Partners and Sun Country Airlines, you can compare the effects of market volatilities on KNOT Offshore 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 KNOT Offshore with a short position of Sun Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOT Offshore and Sun Country.
Diversification Opportunities for KNOT Offshore and Sun Country
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KNOT and Sun is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners 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 KNOT Offshore 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 KNOT Offshore Partners 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 KNOT Offshore i.e., KNOT Offshore and Sun Country go up and down completely randomly.
Pair Corralation between KNOT Offshore and Sun Country
Given the investment horizon of 90 days KNOT Offshore Partners is expected to under-perform the Sun Country. In addition to that, KNOT Offshore is 1.02 times more volatile than Sun Country Airlines. It trades about -0.01 of its total potential returns per unit of risk. Sun Country Airlines is currently generating about -0.01 per unit of volatility. If you would invest 1,921 in Sun Country Airlines on August 25, 2024 and sell it today you would lose (548.00) from holding Sun Country Airlines or give up 28.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KNOT Offshore Partners vs. Sun Country Airlines
Performance |
| Timeline |
| KNOT Offshore Partners |
| Sun Country Airlines |
KNOT Offshore and Sun Country Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOT Offshore and Sun Country
The main advantage of trading using opposite KNOT Offshore and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore 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.| KNOT Offshore vs. USA Compression Partners | KNOT Offshore vs. Dynagas LNG Partners | KNOT Offshore vs. Crossamerica Partners LP | KNOT Offshore vs. Delek Logistics Partners |
| Sun Country vs. Spirit 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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