Correlation Between Sun Country and Gol Linhas

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

Diversification Opportunities for Sun Country and Gol Linhas

0.0

Correlation Coefficient

Sun Country  Gol Linhas

Pay attention - limited upside

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

Pair Corralation between Sun Country and Gol Linhas

If you would invest (100.00) in Gol Linhas Aereas on December 26, 2024 and sell it today you would earn a total of  100.00  from holding Gol Linhas Aereas or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sun Country Airlines  vs.  Gol Linhas Aereas

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.

Gol Linhas Aereas

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gol Linhas Aereas has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Gol Linhas is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sun Country and Gol Linhas

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

The idea behind Sun Country Airlines and Gol Linhas Aereas 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.