Correlation Between Sun Country and Saia

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

Diversification Opportunities for Sun Country and Saia

0.58

Correlation Coefficient

Sun Country  Saia

Very weak diversification

The 3 months correlation between Sun and Saia is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and Saia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saia Inc 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 Saia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saia Inc has no effect on the direction of Sun Country i.e., Sun Country and Saia go up and down completely randomly.

Pair Corralation between Sun Country and Saia

Given the investment horizon of 90 days Sun Country Airlines is expected to generate 1.13 times more return on investment than Saia. However, Sun Country is 1.13 times more volatile than Saia Inc. It trades about 0.0 of its potential returns per unit of risk. Saia Inc is currently generating about -0.32 per unit of risk. If you would invest  1,576  in Sun Country Airlines on October 12, 2024 and sell it today you would lose (10.00) from holding Sun Country Airlines or give up 0.63% of portfolio value over 90 days.

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

Sun Country Airlines  vs.  Saia Inc

Sun Country Airlines

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Country Airlines are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, Sun Country showed solid returns over the last few months and may actually be approaching a breakup point.

Saia Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Saia is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sun Country and Saia

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

The idea behind Sun Country Airlines and Saia Inc 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.