Correlation Between Sapiens International and Sun Country

Can any of the company-specific risk be diversified away by investing in both Sapiens International and Sun Country 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 Sapiens International and Sun Country into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sapiens International and Sun Country Airlines, you can compare the effects of market volatilities on Sapiens International and Sun Country 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 Sapiens International with a short position of Sun Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapiens International and Sun Country.

Diversification Opportunities for Sapiens International and Sun Country

-0.18

Correlation Coefficient

Sapiens International  Sun Country

Good diversification

The 3 months correlation between Sapiens and Sun is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sapiens International and Sun Country Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Country Airlines and Sapiens International 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 Sapiens International are associated (or correlated) with Sun Country. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Country Airlines has no effect on the direction of Sapiens International i.e., Sapiens International and Sun Country go up and down completely randomly.

Pair Corralation between Sapiens International and Sun Country

Given the investment horizon of 90 days Sapiens International is expected to generate 0.53 times more return on investment than Sun Country. However, Sapiens International is 1.9 times less risky than Sun Country. It trades about 0.0 of its potential returns per unit of risk. Sun Country Airlines is currently generating about -0.03 per unit of risk. If you would invest  2,759  in Sapiens International on December 25, 2024 and sell it today you would lose (13.00) from holding Sapiens International or give up 0.47% of portfolio value over 90 days.

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

Sapiens International  vs.  Sun Country Airlines

Sapiens International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sapiens International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Sapiens International is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with Sapiens International and Sun Country

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

The idea behind Sapiens International and Sun Country Airlines 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.