Correlation Between Sun Country and Union Pacific
Can any of the company-specific risk be diversified away by investing in both Sun Country and Union Pacific 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 Union Pacific 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 Union Pacific, you can compare the effects of market volatilities on Sun Country and Union Pacific 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 Union Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Country and Union Pacific.
Diversification Opportunities for Sun Country and Union Pacific
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sun and Union is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and Union Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Pacific 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 Union Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Pacific has no effect on the direction of Sun Country i.e., Sun Country and Union Pacific go up and down completely randomly.
Pair Corralation between Sun Country and Union Pacific
Given the investment horizon of 90 days Sun Country Airlines is expected to generate 1.78 times more return on investment than Union Pacific. However, Sun Country is 1.78 times more volatile than Union Pacific. It trades about 0.21 of its potential returns per unit of risk. Union Pacific is currently generating about 0.1 per unit of risk. If you would invest 1,395 in Sun Country Airlines on November 3, 2024 and sell it today you would earn a total of 301.00 from holding Sun Country Airlines or generate 21.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Country Airlines vs. Union Pacific
Performance |
| Timeline |
| Sun Country Airlines |
| Union Pacific |
Sun Country and Union Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Country and Union Pacific
The main advantage of trading using opposite Sun Country and Union Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Country position performs unexpectedly, Union Pacific 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 Union Pacific will offset losses from the drop in Union Pacific's long position.| Sun Country vs. JetBlue Airways Corp | Sun Country vs. Allegiant Travel | Sun Country vs. Copa Holdings SA | Sun Country vs. SkyWest |
| Union Pacific vs. Norfolk Southern | Union Pacific vs. CSX Corporation | Union Pacific vs. United Parcel Service | Union Pacific vs. Canadian National Railway |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |