Correlation Between Sun Country and Aeries Technology

Can any of the company-specific risk be diversified away by investing in both Sun Country and Aeries Technology 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 Aeries Technology 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 Aeries Technology, you can compare the effects of market volatilities on Sun Country and Aeries Technology 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 Aeries Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Country and Aeries Technology.

Diversification Opportunities for Sun Country and Aeries Technology

0.0

Correlation Coefficient

Sun Country  Aeries Technology

Pay attention - limited upside

The 3 months correlation between Sun and Aeries is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and Aeries Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeries Technology 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 Aeries Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeries Technology has no effect on the direction of Sun Country i.e., Sun Country and Aeries Technology go up and down completely randomly.

Pair Corralation between Sun Country and Aeries Technology

Given the investment horizon of 90 days Sun Country is expected to generate 132.05 times less return on investment than Aeries Technology. But when comparing it to its historical volatility, Sun Country Airlines is 7.88 times less risky than Aeries Technology. It trades about 0.0 of its potential returns per unit of risk. Aeries Technology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  13.00  in Aeries Technology on October 11, 2024 and sell it today you would lose (7.12) from holding Aeries Technology or give up 54.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	24.65%
Values	Daily Returns

Sun Country Airlines  vs.  Aeries Technology

Sun Country Airlines

Risk-Adjusted Performance

15 of 100

Good

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.

Aeries Technology

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aeries Technology are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Aeries Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sun Country and Aeries Technology

The main advantage of trading using opposite Sun Country and Aeries Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Country position performs unexpectedly, Aeries Technology 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 Aeries Technology will offset losses from the drop in Aeries Technology's long position.

The idea behind Sun Country Airlines and Aeries Technology 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.