Correlation Between Sun Country and Nexstar Broadcasting
Can any of the company-specific risk be diversified away by investing in both Sun Country and Nexstar Broadcasting 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 Nexstar Broadcasting 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 Nexstar Broadcasting Group, you can compare the effects of market volatilities on Sun Country and Nexstar Broadcasting 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 Nexstar Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Country and Nexstar Broadcasting.
Diversification Opportunities for Sun Country and Nexstar Broadcasting
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sun and Nexstar is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and Nexstar Broadcasting Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexstar Broadcasting 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 Nexstar Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexstar Broadcasting has no effect on the direction of Sun Country i.e., Sun Country and Nexstar Broadcasting go up and down completely randomly.
Pair Corralation between Sun Country and Nexstar Broadcasting
Given the investment horizon of 90 days Sun Country Airlines is expected to generate 1.2 times more return on investment than Nexstar Broadcasting. However, Sun Country is 1.2 times more volatile than Nexstar Broadcasting Group. It trades about 0.08 of its potential returns per unit of risk. Nexstar Broadcasting Group is currently generating about 0.0 per unit of risk. If you would invest 1,304 in Sun Country Airlines on August 27, 2024 and sell it today you would earn a total of 69.00 from holding Sun Country Airlines or generate 5.29% 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. Nexstar Broadcasting Group
Performance |
| Timeline |
| Sun Country Airlines |
| Nexstar Broadcasting |
Sun Country and Nexstar Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Country and Nexstar Broadcasting
The main advantage of trading using opposite Sun Country and Nexstar Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Country position performs unexpectedly, Nexstar Broadcasting 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 Nexstar Broadcasting will offset losses from the drop in Nexstar Broadcasting's long position.| Sun Country vs. Spirit Airlines | Sun Country vs. JetBlue Airways Corp | Sun Country vs. Allegiant Travel | Sun Country vs. Copa Holdings SA |
| Nexstar Broadcasting vs. News Corp B | Nexstar Broadcasting vs. Fox Corp Class | Nexstar Broadcasting vs. Liberty Media | Nexstar Broadcasting vs. AMC Networks |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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