Correlation Between Sun Country and BCE
Can any of the company-specific risk be diversified away by investing in both Sun Country and BCE 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 BCE 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 BCE Inc, you can compare the effects of market volatilities on Sun Country and BCE 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 BCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Country and BCE.
Diversification Opportunities for Sun Country and BCE
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sun and BCE is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc 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 BCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCE Inc has no effect on the direction of Sun Country i.e., Sun Country and BCE go up and down completely randomly.
Pair Corralation between Sun Country and BCE
Given the investment horizon of 90 days Sun Country Airlines is expected to generate 2.57 times more return on investment than BCE. However, Sun Country is 2.57 times more volatile than BCE Inc. It trades about 0.0 of its potential returns per unit of risk. BCE Inc is currently generating about -0.09 per unit of risk. If you would invest 1,998 in Sun Country Airlines on November 28, 2024 and sell it today you would lose (324.00) from holding Sun Country Airlines or give up 16.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Country Airlines vs. BCE Inc
Performance |
| Timeline |
| Sun Country Airlines |
| BCE Inc |
Sun Country and BCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Country and BCE
The main advantage of trading using opposite Sun Country and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Country position performs unexpectedly, BCE 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 BCE will offset losses from the drop in BCE's long position.| Sun Country vs. JetBlue Airways Corp | Sun Country vs. Allegiant Travel | Sun Country vs. Copa Holdings SA | Sun Country vs. SkyWest |
| BCE vs. Rogers Communications | BCE vs. America Movil SAB | BCE vs. Telus Corp | BCE vs. Telefonica Brasil SA |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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