Correlation Between MYT Netherlands and Sun Country

Can any of the company-specific risk be diversified away by investing in both MYT Netherlands 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 MYT Netherlands and Sun Country into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MYT Netherlands Parent and Sun Country Airlines, you can compare the effects of market volatilities on MYT Netherlands 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 MYT Netherlands with a short position of Sun Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYT Netherlands and Sun Country.

Diversification Opportunities for MYT Netherlands and Sun Country

-0.78

Correlation Coefficient

MYT Netherlands  Sun Country

Pay attention - limited upside

The 3 months correlation between MYT and Sun is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding MYT Netherlands Parent 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 MYT Netherlands 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 MYT Netherlands Parent 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 MYT Netherlands i.e., MYT Netherlands and Sun Country go up and down completely randomly.

Pair Corralation between MYT Netherlands and Sun Country

Given the investment horizon of 90 days MYT Netherlands Parent is expected to generate 1.54 times more return on investment than Sun Country. However, MYT Netherlands is 1.54 times more volatile than Sun Country Airlines. It trades about 0.12 of its potential returns per unit of risk. Sun Country Airlines is currently generating about -0.09 per unit of risk. If you would invest  324.00  in MYT Netherlands Parent on February 15, 2024 and sell it today you would earn a total of  176.00  from holding MYT Netherlands Parent or generate 54.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

MYT Netherlands Parent  vs.  Sun Country Airlines

MYT Netherlands Parent

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MYT Netherlands Parent are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, MYT Netherlands exhibited solid returns over the last few months and may actually be approaching a breakup point.

Sun Country Airlines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sun Country Airlines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with MYT Netherlands and Sun Country

The main advantage of trading using opposite MYT Netherlands and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYT Netherlands 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.

The idea behind MYT Netherlands Parent and Sun Country Airlines 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.