Correlation Between Coca Cola and Sun Country
Can any of the company-specific risk be diversified away by investing in both Coca Cola 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 Coca Cola and Sun Country into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Coca Cola and Sun Country Airlines, you can compare the effects of market volatilities on Coca Cola 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 Coca Cola with a short position of Sun Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Sun Country.
Diversification Opportunities for Coca Cola and Sun Country
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and Sun is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola 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 Coca Cola 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 The Coca Cola 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 Coca Cola i.e., Coca Cola and Sun Country go up and down completely randomly.
Pair Corralation between Coca Cola and Sun Country
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.31 times more return on investment than Sun Country. However, The Coca Cola is 3.26 times less risky than Sun Country. It trades about 0.09 of its potential returns per unit of risk. Sun Country Airlines is currently generating about 0.02 per unit of risk. If you would invest 6,272 in The Coca Cola on September 13, 2024 and sell it today you would earn a total of 101.50 from holding The Coca Cola or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Sun Country Airlines
Performance |
| Timeline |
| Coca Cola |
| Sun Country Airlines |
Coca Cola and Sun Country Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Sun Country
The main advantage of trading using opposite Coca Cola and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola 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.| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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