Correlation Between Sun Country and Delek Logistics

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

Diversification Opportunities for Sun Country and Delek Logistics

0.07

Correlation Coefficient

Sun Country  Delek Logistics

Significant diversification

The 3 months correlation between Sun and Delek is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and Delek Logistics Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Logistics Partners 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 Delek Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Logistics Partners has no effect on the direction of Sun Country i.e., Sun Country and Delek Logistics go up and down completely randomly.

Pair Corralation between Sun Country and Delek Logistics

Given the investment horizon of 90 days Sun Country Airlines is expected to under-perform the Delek Logistics. In addition to that, Sun Country is 2.16 times more volatile than Delek Logistics Partners. It trades about -0.05 of its total potential returns per unit of risk. Delek Logistics Partners is currently generating about 0.12 per unit of volatility. If you would invest  3,992  in Delek Logistics Partners on December 26, 2024 and sell it today you would earn a total of  393.00  from holding Delek Logistics Partners or generate 9.84% return on investment over 90 days.

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

Sun Country Airlines  vs.  Delek Logistics Partners

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.

Delek Logistics Partners

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Logistics Partners are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent forward-looking signals, Delek Logistics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sun Country and Delek Logistics

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

The idea behind Sun Country Airlines and Delek Logistics Partners 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.