Correlation Between Sun Country and Unum
Can any of the company-specific risk be diversified away by investing in both Sun Country and Unum 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 Unum 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 Unum Group, you can compare the effects of market volatilities on Sun Country and Unum 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 Unum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Country and Unum.
Diversification Opportunities for Sun Country and Unum
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and Unum is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and Unum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unum 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 Unum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unum Group has no effect on the direction of Sun Country i.e., Sun Country and Unum go up and down completely randomly.
Pair Corralation between Sun Country and Unum
Given the investment horizon of 90 days Sun Country Airlines is expected to generate 3.67 times more return on investment than Unum. However, Sun Country is 3.67 times more volatile than Unum Group. It trades about 0.01 of its potential returns per unit of risk. Unum Group is currently generating about 0.04 per unit of risk. If you would invest 1,632 in Sun Country Airlines on September 12, 2024 and sell it today you would lose (119.00) from holding Sun Country Airlines or give up 7.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Country Airlines vs. Unum Group
Performance |
| Timeline |
| Sun Country Airlines |
| Unum Group |
Sun Country and Unum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Country and Unum
The main advantage of trading using opposite Sun Country and Unum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Country position performs unexpectedly, Unum 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 Unum will offset losses from the drop in Unum's long position.| Sun Country vs. JetBlue Airways Corp | Sun Country vs. Allegiant Travel | Sun Country vs. Copa Holdings SA | Sun Country vs. SkyWest |
| Unum vs. Suburban Propane Partners | Unum vs. Sun Country Airlines | Unum vs. Afya | Unum vs. Yuexiu Transport Infrastructure |
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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