Correlation Between Scholastic and Sun Country
Can any of the company-specific risk be diversified away by investing in both Scholastic 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 Scholastic and Sun Country into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scholastic and Sun Country Airlines, you can compare the effects of market volatilities on Scholastic 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 Scholastic with a short position of Sun Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scholastic and Sun Country.
Diversification Opportunities for Scholastic and Sun Country
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Scholastic and Sun is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Scholastic 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 Scholastic 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 Scholastic 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 Scholastic i.e., Scholastic and Sun Country go up and down completely randomly.
Pair Corralation between Scholastic and Sun Country
Given the investment horizon of 90 days Scholastic is expected to generate 0.95 times more return on investment than Sun Country. However, Scholastic is 1.05 times less risky than Sun Country. It trades about 0.24 of its potential returns per unit of risk. Sun Country Airlines is currently generating about 0.01 per unit of risk. If you would invest 2,379 in Scholastic on September 3, 2024 and sell it today you would earn a total of 298.00 from holding Scholastic or generate 12.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scholastic vs. Sun Country Airlines
Performance |
| Timeline |
| Scholastic |
| Sun Country Airlines |
Scholastic and Sun Country Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scholastic and Sun Country
The main advantage of trading using opposite Scholastic and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scholastic 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.| Scholastic vs. New York Times | Scholastic vs. Gannett Co | Scholastic vs. Lee Enterprises Incorporated | Scholastic vs. Pearson PLC ADR |
| Sun Country vs. Copa Holdings SA | Sun Country vs. SkyWest | Sun Country vs. Air Transport Services | Sun Country vs. Mesa Air Group |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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