Correlation Between Sun Country and Barings BDC
Can any of the company-specific risk be diversified away by investing in both Sun Country and Barings BDC 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 Barings BDC 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 Barings BDC, you can compare the effects of market volatilities on Sun Country and Barings BDC 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 Barings BDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Country and Barings BDC.
Diversification Opportunities for Sun Country and Barings BDC
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sun and Barings is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and Barings BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings BDC 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 Barings BDC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings BDC has no effect on the direction of Sun Country i.e., Sun Country and Barings BDC go up and down completely randomly.
Pair Corralation between Sun Country and Barings BDC
Given the investment horizon of 90 days Sun Country Airlines is expected to generate 3.66 times more return on investment than Barings BDC. However, Sun Country is 3.66 times more volatile than Barings BDC. It trades about 0.15 of its potential returns per unit of risk. Barings BDC is currently generating about 0.02 per unit of risk. If you would invest 1,117 in Sun Country Airlines on September 12, 2024 and sell it today you would earn a total of 396.00 from holding Sun Country Airlines or generate 35.45% 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. Barings BDC
Performance |
| Timeline |
| Sun Country Airlines |
| Barings BDC |
Sun Country and Barings BDC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Country and Barings BDC
The main advantage of trading using opposite Sun Country and Barings BDC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Country position performs unexpectedly, Barings BDC 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 Barings BDC will offset losses from the drop in Barings BDC's long position.| Sun Country vs. American Airlines Group | Sun Country vs. Southwest Airlines | Sun Country vs. United Airlines Holdings | Sun Country vs. Frontier Group Holdings |
| Barings BDC vs. Runway Growth Finance | Barings BDC vs. OneMain Holdings | Barings BDC vs. Navient Corp | Barings BDC vs. Oaktree Specialty Lending |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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