Correlation Between Dave Busters and Sun Country

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

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

Diversification Opportunities for Dave Busters and Sun Country

0.06

Correlation Coefficient

Dave Busters  Sun Country

Significant diversification

The 3 months correlation between Dave and Sun is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment 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 Dave Busters 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 Dave Busters Entertainment 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 Dave Busters i.e., Dave Busters and Sun Country go up and down completely randomly.

Pair Corralation between Dave Busters and Sun Country

Given the investment horizon of 90 days Dave Busters Entertainment is expected to under-perform the Sun Country. In addition to that, Dave Busters is 1.41 times more volatile than Sun Country Airlines. It trades about -0.02 of its total potential returns per unit of risk. Sun Country Airlines is currently generating about 0.15 per unit of volatility. If you would invest  1,121  in Sun Country Airlines on September 30, 2024 and sell it today you would earn a total of  373.00  from holding Sun Country Airlines or generate 33.27% return on investment over 90 days.

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

Dave Busters Entertainment  vs.  Sun Country Airlines

Dave Busters Enterta

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dave Busters Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company 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 Dave Busters and Sun Country

The main advantage of trading using opposite Dave Busters and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters 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 Dave Busters Entertainment 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.