Correlation Between Sun Country and Investec

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

Diversification Opportunities for Sun Country and Investec

0.15

Correlation Coefficient

Sun Country  Investec

Average diversification

The 3 months correlation between Sun and Investec is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and Investec Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Group 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 Investec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Group has no effect on the direction of Sun Country i.e., Sun Country and Investec go up and down completely randomly.

Pair Corralation between Sun Country and Investec

Given the investment horizon of 90 days Sun Country Airlines is expected to under-perform the Investec. In addition to that, Sun Country is 8.37 times more volatile than Investec Group. It trades about 0.0 of its total potential returns per unit of risk. Investec Group is currently generating about 0.09 per unit of volatility. If you would invest  939.00  in Investec Group on October 25, 2024 and sell it today you would earn a total of  165.00  from holding Investec Group or generate 17.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Sun Country Airlines  vs.  Investec Group

Sun Country Airlines

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Country Airlines are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting fundamental indicators, Sun Country showed solid returns over the last few months and may actually be approaching a breakup point.

Investec Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Investec Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong forward-looking indicators, Investec is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sun Country and Investec

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

The idea behind Sun Country Airlines and Investec Group 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.