Correlation Between Global Ship and Sun Country

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

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

Diversification Opportunities for Global Ship and Sun Country

-0.01

Correlation Coefficient

Global Ship  Sun Country

Good diversification

The 3 months correlation between Global and Sun is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease 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 Global Ship 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 Global Ship Lease 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 Global Ship i.e., Global Ship and Sun Country go up and down completely randomly.

Pair Corralation between Global Ship and Sun Country

Assuming the 90 days trading horizon Global Ship Lease is expected to generate 0.26 times more return on investment than Sun Country. However, Global Ship Lease is 3.82 times less risky than Sun Country. It trades about 0.07 of its potential returns per unit of risk. Sun Country Airlines is currently generating about 0.01 per unit of risk. If you would invest  2,043  in Global Ship Lease on September 21, 2024 and sell it today you would earn a total of  603.00  from holding Global Ship Lease or generate 29.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Global Ship Lease  vs.  Sun Country Airlines

Global Ship Lease

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global Ship Lease are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Global Ship is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Sun Country Airlines

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Country Airlines are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, Sun Country showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Ship and Sun Country

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

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.