Correlation Between Sun Country and Relief Therapeutics

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

Diversification Opportunities for Sun Country and Relief Therapeutics

-0.01

Correlation Coefficient

Sun Country  Relief Therapeutics

Good diversification

The 3 months correlation between Sun and Relief is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and Relief Therapeutics Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Relief Therapeutics 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 Relief Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Relief Therapeutics has no effect on the direction of Sun Country i.e., Sun Country and Relief Therapeutics go up and down completely randomly.

Pair Corralation between Sun Country and Relief Therapeutics

Given the investment horizon of 90 days Sun Country Airlines is expected to generate 0.65 times more return on investment than Relief Therapeutics. However, Sun Country Airlines is 1.54 times less risky than Relief Therapeutics. It trades about -0.07 of its potential returns per unit of risk. Relief Therapeutics Holding is currently generating about -0.16 per unit of risk. If you would invest  1,478  in Sun Country Airlines on December 19, 2024 and sell it today you would lose (189.00) from holding Sun Country Airlines or give up 12.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Sun Country Airlines  vs.  Relief Therapeutics Holding

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.

Relief Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Relief Therapeutics Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Sun Country and Relief Therapeutics

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

The idea behind Sun Country Airlines and Relief Therapeutics Holding 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.