Correlation Between Sun Country and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Sun Country and Ross Stores 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 Ross Stores 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 Ross Stores, you can compare the effects of market volatilities on Sun Country and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Country and Ross Stores.
Diversification Opportunities for Sun Country and Ross Stores
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sun and Ross is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Sun Country i.e., Sun Country and Ross Stores go up and down completely randomly.
Pair Corralation between Sun Country and Ross Stores
Given the investment horizon of 90 days Sun Country is expected to generate 1.48 times less return on investment than Ross Stores. In addition to that, Sun Country is 1.84 times more volatile than Ross Stores. It trades about 0.08 of its total potential returns per unit of risk. Ross Stores is currently generating about 0.21 per unit of volatility. If you would invest 14,097 in Ross Stores on September 19, 2024 and sell it today you would earn a total of 988.00 from holding Ross Stores or generate 7.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Country Airlines vs. Ross Stores
Performance |
| Timeline |
| Sun Country Airlines |
| Ross Stores |
Sun Country and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Country and Ross Stores
The main advantage of trading using opposite Sun Country and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Country position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| Sun Country vs. JetBlue Airways Corp | Sun Country vs. Allegiant Travel | Sun Country vs. Copa Holdings SA | Sun Country vs. SkyWest |
| Ross Stores vs. Capri Holdings | Ross Stores vs. Movado Group | Ross Stores vs. Tapestry | Ross Stores vs. Brilliant Earth Group |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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