Correlation Between Sun Country and Air T
Can any of the company-specific risk be diversified away by investing in both Sun Country and Air T 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 Air T 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 Air T Inc, you can compare the effects of market volatilities on Sun Country and Air T 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 Air T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Country and Air T.
Diversification Opportunities for Sun Country and Air T
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and Air is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and Air T Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air T Inc 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 Air T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air T Inc has no effect on the direction of Sun Country i.e., Sun Country and Air T go up and down completely randomly.
Pair Corralation between Sun Country and Air T
Given the investment horizon of 90 days Sun Country Airlines is expected to generate 0.85 times more return on investment than Air T. However, Sun Country Airlines is 1.17 times less risky than Air T. It trades about 0.22 of its potential returns per unit of risk. Air T Inc is currently generating about -0.08 per unit of risk. If you would invest 1,070 in Sun Country Airlines on April 2, 2024 and sell it today you would earn a total of 173.00 from holding Sun Country Airlines or generate 16.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sun Country Airlines vs. Air T Inc
Performance |
Timeline |
Sun Country Airlines |
Air T Inc |
Sun Country and Air T Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sun Country and Air T
The main advantage of trading using opposite Sun Country and Air T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Country position performs unexpectedly, Air T 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 Air T will offset losses from the drop in Air T's long position.Sun Country vs. Spirit Airlines | Sun Country vs. JetBlue Airways Corp | Sun Country vs. Hawaiian Holdings | Sun Country vs. Allegiant Travel |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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