Correlation Between Sun Country and Fresh2
Can any of the company-specific risk be diversified away by investing in both Sun Country and Fresh2 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 Fresh2 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 Fresh2 Group, you can compare the effects of market volatilities on Sun Country and Fresh2 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 Fresh2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Country and Fresh2.
Diversification Opportunities for Sun Country and Fresh2
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and Fresh2 is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and Fresh2 Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresh2 Group 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 Fresh2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresh2 Group has no effect on the direction of Sun Country i.e., Sun Country and Fresh2 go up and down completely randomly.
Pair Corralation between Sun Country and Fresh2
Given the investment horizon of 90 days Sun Country Airlines is expected to generate 0.45 times more return on investment than Fresh2. However, Sun Country Airlines is 2.21 times less risky than Fresh2. It trades about 0.09 of its potential returns per unit of risk. Fresh2 Group is currently generating about -0.11 per unit of risk. If you would invest 1,060 in Sun Country Airlines on September 3, 2024 and sell it today you would earn a total of 379.00 from holding Sun Country Airlines or generate 35.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Country Airlines vs. Fresh2 Group
Performance |
| Timeline |
| Sun Country Airlines |
| Fresh2 Group |
Sun Country and Fresh2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Country and Fresh2
The main advantage of trading using opposite Sun Country and Fresh2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Country position performs unexpectedly, Fresh2 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 Fresh2 will offset losses from the drop in Fresh2's long position.| Sun Country vs. Copa Holdings SA | Sun Country vs. SkyWest | Sun Country vs. Air Transport Services | Sun Country vs. Mesa Air Group |
| Fresh2 vs. Crinetics Pharmaceuticals | Fresh2 vs. Viridian Therapeutics | Fresh2 vs. Cytokinetics | Fresh2 vs. Structure Therapeutics American |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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