Correlation Between Sun Country and Apogee Enterprises
Can any of the company-specific risk be diversified away by investing in both Sun Country and Apogee Enterprises 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 Apogee Enterprises 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 Apogee Enterprises, you can compare the effects of market volatilities on Sun Country and Apogee Enterprises 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 Apogee Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Country and Apogee Enterprises.
Diversification Opportunities for Sun Country and Apogee Enterprises
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sun and Apogee is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises 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 Apogee Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apogee Enterprises has no effect on the direction of Sun Country i.e., Sun Country and Apogee Enterprises go up and down completely randomly.
Pair Corralation between Sun Country and Apogee Enterprises
Given the investment horizon of 90 days Sun Country Airlines is expected to under-perform the Apogee Enterprises. In addition to that, Sun Country is 1.52 times more volatile than Apogee Enterprises. It trades about -0.02 of its total potential returns per unit of risk. Apogee Enterprises is currently generating about 0.09 per unit of volatility. If you would invest 4,580 in Apogee Enterprises on August 28, 2024 and sell it today you would earn a total of 3,907 from holding Apogee Enterprises or generate 85.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Country Airlines vs. Apogee Enterprises
Performance |
| Timeline |
| Sun Country Airlines |
| Apogee Enterprises |
Sun Country and Apogee Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Country and Apogee Enterprises
The main advantage of trading using opposite Sun Country and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Country position performs unexpectedly, Apogee Enterprises 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 Apogee Enterprises will offset losses from the drop in Apogee Enterprises' long position.| Sun Country vs. Spirit Airlines | Sun Country vs. JetBlue Airways Corp | Sun Country vs. Allegiant Travel | Sun Country vs. Copa Holdings SA |
| Apogee Enterprises vs. Trex Company | Apogee Enterprises vs. Travis Perkins PLC | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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