Correlation Between Sun Country and Black Hills
Can any of the company-specific risk be diversified away by investing in both Sun Country and Black Hills 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 Black Hills 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 Black Hills, you can compare the effects of market volatilities on Sun Country and Black Hills 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 Black Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Country and Black Hills.
Diversification Opportunities for Sun Country and Black Hills
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sun and Black is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and Black Hills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Hills 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 Black Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Hills has no effect on the direction of Sun Country i.e., Sun Country and Black Hills go up and down completely randomly.
Pair Corralation between Sun Country and Black Hills
Given the investment horizon of 90 days Sun Country is expected to generate 3.12 times less return on investment than Black Hills. In addition to that, Sun Country is 2.64 times more volatile than Black Hills. It trades about 0.01 of its total potential returns per unit of risk. Black Hills is currently generating about 0.05 per unit of volatility. If you would invest 5,267 in Black Hills on September 14, 2024 and sell it today you would earn a total of 853.50 from holding Black Hills or generate 16.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Country Airlines vs. Black Hills
Performance |
| Timeline |
| Sun Country Airlines |
| Black Hills |
Sun Country and Black Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Country and Black Hills
The main advantage of trading using opposite Sun Country and Black Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Country position performs unexpectedly, Black Hills 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 Black Hills will offset losses from the drop in Black Hills' long position.| Sun Country vs. Southwest Airlines | Sun Country vs. United Airlines Holdings | Sun Country vs. Frontier Group Holdings |
| Black Hills vs. NewJersey Resources | Black Hills vs. Northwest Natural Gas | Black Hills vs. Spire Inc | Black Hills vs. Chesapeake Utilities |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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