Correlation Between Sun Country and 893830BX6

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Can any of the company-specific risk be diversified away by investing in both Sun Country and 893830BX6 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 893830BX6 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 RIG 875 15 FEB 30, you can compare the effects of market volatilities on Sun Country and 893830BX6 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 893830BX6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Country and 893830BX6.

Diversification Opportunities for Sun Country and 893830BX6

-0.05
  Correlation Coefficient

Good diversification

The 3 months correlation between Sun and 893830BX6 is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and RIG 875 15 FEB 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RIG 875 15 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 893830BX6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RIG 875 15 has no effect on the direction of Sun Country i.e., Sun Country and 893830BX6 go up and down completely randomly.

Pair Corralation between Sun Country and 893830BX6

Given the investment horizon of 90 days Sun Country Airlines is expected to under-perform the 893830BX6. In addition to that, Sun Country is 8.92 times more volatile than RIG 875 15 FEB 30. It trades about -0.01 of its total potential returns per unit of risk. RIG 875 15 FEB 30 is currently generating about 0.02 per unit of volatility. If you would invest  10,235  in RIG 875 15 FEB 30 on September 3, 2024 and sell it today you would earn a total of  165.00  from holding RIG 875 15 FEB 30 or generate 1.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.14%
ValuesDaily Returns

Sun Country Airlines  vs.  RIG 875 15 FEB 30

 Performance 
       Timeline  
Sun Country Airlines 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Sun Country Airlines are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Sun Country showed solid returns over the last few months and may actually be approaching a breakup point.
RIG 875 15 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days RIG 875 15 FEB 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 893830BX6 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sun Country and 893830BX6 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sun Country and 893830BX6

The main advantage of trading using opposite Sun Country and 893830BX6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Country position performs unexpectedly, 893830BX6 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 893830BX6 will offset losses from the drop in 893830BX6's long position.
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The idea behind Sun Country Airlines and RIG 875 15 FEB 30 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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.

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