Correlation Between Sun Country and Bright Scholar
Can any of the company-specific risk be diversified away by investing in both Sun Country and Bright Scholar 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 Bright Scholar 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 Bright Scholar Education, you can compare the effects of market volatilities on Sun Country and Bright Scholar 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 Bright Scholar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Country and Bright Scholar.
Diversification Opportunities for Sun Country and Bright Scholar
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and Bright is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and Bright Scholar Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Scholar Education 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 Bright Scholar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Scholar Education has no effect on the direction of Sun Country i.e., Sun Country and Bright Scholar go up and down completely randomly.
Pair Corralation between Sun Country and Bright Scholar
Given the investment horizon of 90 days Sun Country Airlines is expected to generate 0.65 times more return on investment than Bright Scholar. However, Sun Country Airlines is 1.54 times less risky than Bright Scholar. It trades about 0.1 of its potential returns per unit of risk. Bright Scholar Education is currently generating about -0.03 per unit of risk. If you would invest 1,119 in Sun Country Airlines on December 5, 2024 and sell it today you would earn a total of 430.50 from holding Sun Country Airlines or generate 38.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 97.56% |
Values | Daily Returns |
Sun Country Airlines vs. Bright Scholar Education
Performance |
Timeline |
Sun Country Airlines |
Bright Scholar Education |
Sun Country and Bright Scholar Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sun Country and Bright Scholar
The main advantage of trading using opposite Sun Country and Bright Scholar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Country position performs unexpectedly, Bright Scholar 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 Bright Scholar will offset losses from the drop in Bright Scholar's long position.Sun Country vs. JetBlue Airways Corp | Sun Country vs. Allegiant Travel | Sun Country vs. Copa Holdings SA | Sun Country vs. SkyWest |
Bright Scholar vs. Laureate Education | Bright Scholar vs. China Liberal Education | Bright Scholar vs. Adtalem Global Education | Bright Scholar vs. Grand Canyon Education |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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