Correlation Between Relief Therapeutics and Sun Country

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

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

Diversification Opportunities for Relief Therapeutics and Sun Country

-0.11

Correlation Coefficient

Relief Therapeutics  Sun Country

Good diversification

The 3 months correlation between Relief and Sun is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Relief Therapeutics Holding 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 Relief Therapeutics 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 Relief Therapeutics Holding 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 Relief Therapeutics i.e., Relief Therapeutics and Sun Country go up and down completely randomly.

Pair Corralation between Relief Therapeutics and Sun Country

Assuming the 90 days horizon Relief Therapeutics is expected to generate 3.67 times less return on investment than Sun Country. In addition to that, Relief Therapeutics is 2.25 times more volatile than Sun Country Airlines. It trades about 0.0 of its total potential returns per unit of risk. Sun Country Airlines is currently generating about 0.0 per unit of volatility. If you would invest  1,863  in Sun Country Airlines on October 11, 2024 and sell it today you would lose (297.00) from holding Sun Country Airlines or give up 15.94% of portfolio value over 90 days.

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

Relief Therapeutics Holding  vs.  Sun Country Airlines

Relief Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Relief Therapeutics Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Relief Therapeutics is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Sun Country Airlines

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Country Airlines are ranked lower than 15 (%) 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 Relief Therapeutics and Sun Country

The main advantage of trading using opposite Relief Therapeutics and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Relief Therapeutics 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 Relief Therapeutics Holding 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.