Correlation Between Sun Country and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Sun Country and Coca Cola 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 Coca Cola 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 The Coca Cola, you can compare the effects of market volatilities on Sun Country and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Country and Coca Cola.
Diversification Opportunities for Sun Country and Coca Cola
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sun and Coca is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of Sun Country i.e., Sun Country and Coca Cola go up and down completely randomly.
Pair Corralation between Sun Country and Coca Cola
Given the investment horizon of 90 days Sun Country Airlines is expected to under-perform the Coca Cola. In addition to that, Sun Country is 3.89 times more volatile than The Coca Cola. It trades about -0.02 of its total potential returns per unit of risk. The Coca Cola is currently generating about 0.02 per unit of volatility. If you would invest 5,959 in The Coca Cola on September 12, 2024 and sell it today you would earn a total of 332.00 from holding The Coca Cola or generate 5.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Country Airlines vs. The Coca Cola
Performance |
| Timeline |
| Sun Country Airlines |
| Coca Cola |
Sun Country and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Country and Coca Cola
The main advantage of trading using opposite Sun Country and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Country position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| Sun Country vs. JetBlue Airways Corp | Sun Country vs. Allegiant Travel | Sun Country vs. Copa Holdings SA | Sun Country vs. SkyWest |
| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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