Correlation Between Sun Country and SEI Investments
Can any of the company-specific risk be diversified away by investing in both Sun Country and SEI Investments 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 SEI Investments 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 SEI Investments, you can compare the effects of market volatilities on Sun Country and SEI Investments 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 SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Country and SEI Investments.
Diversification Opportunities for Sun Country and SEI Investments
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sun and SEI is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments 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 SEI Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI Investments has no effect on the direction of Sun Country i.e., Sun Country and SEI Investments go up and down completely randomly.
Pair Corralation between Sun Country and SEI Investments
Given the investment horizon of 90 days Sun Country Airlines is expected to under-perform the SEI Investments. In addition to that, Sun Country is 3.6 times more volatile than SEI Investments. It trades about -0.03 of its total potential returns per unit of risk. SEI Investments is currently generating about 0.42 per unit of volatility. If you would invest 8,065 in SEI Investments on September 14, 2024 and sell it today you would earn a total of 593.00 from holding SEI Investments or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sun Country Airlines vs. SEI Investments
Performance |
| Timeline |
| Sun Country Airlines |
| SEI Investments |
Sun Country and SEI Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Country and SEI Investments
The main advantage of trading using opposite Sun Country and SEI Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Country position performs unexpectedly, SEI Investments 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 SEI Investments will offset losses from the drop in SEI Investments' long position.| Sun Country vs. Southwest Airlines | Sun Country vs. United Airlines Holdings | Sun Country vs. Frontier Group Holdings |
| SEI Investments vs. Visa Class A | SEI Investments vs. Diamond Hill Investment | SEI Investments vs. Distoken Acquisition | SEI Investments vs. AllianceBernstein Holding LP |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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