Correlation Between Singapore Airlines and Sun Country

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

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

Diversification Opportunities for Singapore Airlines and Sun Country

-0.46

Correlation Coefficient

Singapore Airlines  Sun Country

Very good diversification

The 3 months correlation between Singapore and Sun is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines 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 Singapore Airlines 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 Singapore Airlines 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 Singapore Airlines i.e., Singapore Airlines and Sun Country go up and down completely randomly.

Pair Corralation between Singapore Airlines and Sun Country

Assuming the 90 days horizon Singapore Airlines is expected to generate 0.29 times more return on investment than Sun Country. However, Singapore Airlines is 3.4 times less risky than Sun Country. It trades about 0.16 of its potential returns per unit of risk. Sun Country Airlines is currently generating about -0.06 per unit of risk. If you would invest  940.00  in Singapore Airlines on December 20, 2024 and sell it today you would earn a total of  74.00  from holding Singapore Airlines or generate 7.87% return on investment over 90 days.

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

Singapore Airlines  vs.  Sun Country Airlines

Singapore Airlines

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Singapore Airlines are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Singapore Airlines may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Sun Country Airlines

Risk-Adjusted Performance

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 latest unsteady performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Singapore Airlines and Sun Country

The main advantage of trading using opposite Singapore Airlines and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines 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 Singapore Airlines 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.