Correlation Between Yum Brands and Sun Country
Can any of the company-specific risk be diversified away by investing in both Yum Brands and Sun Country 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 Yum Brands and Sun Country into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yum Brands and Sun Country Airlines, you can compare the effects of market volatilities on Yum Brands and Sun Country 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 Yum Brands with a short position of Sun Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yum Brands and Sun Country.
Diversification Opportunities for Yum Brands and Sun Country
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Yum and Sun is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Yum Brands and Sun Country Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Country Airlines and Yum Brands 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 Yum Brands are associated (or correlated) with Sun Country. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Country Airlines has no effect on the direction of Yum Brands i.e., Yum Brands and Sun Country go up and down completely randomly.
Pair Corralation between Yum Brands and Sun Country
Considering the 90-day investment horizon Yum Brands is expected to generate 0.38 times more return on investment than Sun Country. However, Yum Brands is 2.64 times less risky than Sun Country. It trades about 0.2 of its potential returns per unit of risk. Sun Country Airlines is currently generating about 0.0 per unit of risk. If you would invest 13,212 in Yum Brands on September 5, 2024 and sell it today you would earn a total of 604.00 from holding Yum Brands or generate 4.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yum Brands vs. Sun Country Airlines
Performance |
| Timeline |
| Yum Brands |
| Sun Country Airlines |
Yum Brands and Sun Country Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yum Brands and Sun Country
The main advantage of trading using opposite Yum Brands and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yum Brands position performs unexpectedly, Sun Country 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 Sun Country will offset losses from the drop in Sun Country's long position.| Yum Brands vs. Hyatt Hotels | Yum Brands vs. Smart Share Global | Yum Brands vs. Wyndham Hotels Resorts | Yum Brands vs. WW International |
| Sun Country vs. JetBlue Airways Corp | Sun Country vs. Allegiant Travel | Sun Country vs. Copa Holdings SA | Sun Country vs. SkyWest |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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