Correlation Between Sun Country and Alvotech
Can any of the company-specific risk be diversified away by investing in both Sun Country and Alvotech 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 Sun Country and Alvotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Country Airlines and Alvotech, you can compare the effects of market volatilities on Sun Country and Alvotech 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 Sun Country with a short position of Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Country and Alvotech.
Diversification Opportunities for Sun Country and Alvotech
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sun and Alvotech is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Sun Country 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 Sun Country Airlines are associated (or correlated) with Alvotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alvotech has no effect on the direction of Sun Country i.e., Sun Country and Alvotech go up and down completely randomly.
Pair Corralation between Sun Country and Alvotech
Given the investment horizon of 90 days Sun Country Airlines is expected to generate 2.17 times more return on investment than Alvotech. However, Sun Country is 2.17 times more volatile than Alvotech. It trades about 0.09 of its potential returns per unit of risk. Alvotech is currently generating about -0.25 per unit of risk. If you would invest 1,304 in Sun Country Airlines on August 29, 2024 and sell it today you would earn a total of 89.00 from holding Sun Country Airlines or generate 6.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Country Airlines vs. Alvotech
Performance |
| Timeline |
| Sun Country Airlines |
| Alvotech |
Sun Country and Alvotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Country and Alvotech
The main advantage of trading using opposite Sun Country and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Country position performs unexpectedly, Alvotech 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 Alvotech will offset losses from the drop in Alvotech's long position.| Sun Country vs. JetBlue Airways Corp | Sun Country vs. SkyWest | Sun Country vs. International Consolidated Airlines | Sun Country vs. Spirit Airlines |
| Alvotech vs. Intracellular Th | Alvotech vs. Catalent | Alvotech vs. Amphastar P | Alvotech vs. Assertio Therapeutics |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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