Correlation Between Sun Country and WPLAU

Can any of the company-specific risk be diversified away by investing in both Sun Country and WPLAU 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 WPLAU 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 WPLAU 37 15 SEP 26, you can compare the effects of market volatilities on Sun Country and WPLAU 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 WPLAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Country and WPLAU.

Diversification Opportunities for Sun Country and WPLAU

0.87

Correlation Coefficient

Sun Country  WPLAU

Very poor diversification

The 3 months correlation between Sun and WPLAU is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and WPLAU 37 15 SEP 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WPLAU 37 15 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 WPLAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WPLAU 37 15 has no effect on the direction of Sun Country i.e., Sun Country and WPLAU go up and down completely randomly.

Pair Corralation between Sun Country and WPLAU

Given the investment horizon of 90 days Sun Country Airlines is expected to under-perform the WPLAU. In addition to that, Sun Country is 10.96 times more volatile than WPLAU 37 15 SEP 26. It trades about -0.01 of its total potential returns per unit of risk. WPLAU 37 15 SEP 26 is currently generating about 0.32 per unit of volatility. If you would invest  9,767  in WPLAU 37 15 SEP 26 on September 19, 2024 and sell it today you would earn a total of  88.00  from holding WPLAU 37 15 SEP 26 or generate 0.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	45.45%
Values	Daily Returns

Sun Country Airlines  vs.  WPLAU 37 15 SEP 26

Sun Country Airlines

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Country Airlines are ranked lower than 8 (%) 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.

WPLAU 37 15

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in WPLAU 37 15 SEP 26 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, WPLAU 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 WPLAU

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

The idea behind Sun Country Airlines and WPLAU 37 15 SEP 26 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.