Correlation Between CROWN and Sun Country

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

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

Diversification Opportunities for CROWN and Sun Country

-0.38

Correlation Coefficient

CROWN  Sun Country

Very good diversification

The 3 months correlation between CROWN and Sun is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding CROWN CASTLE INTL 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 CROWN 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 CROWN CASTLE INTL 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 CROWN i.e., CROWN and Sun Country go up and down completely randomly.

Pair Corralation between CROWN and Sun Country

Assuming the 90 days trading horizon CROWN CASTLE INTL is expected to under-perform the Sun Country. But the bond apears to be less risky and, when comparing its historical volatility, CROWN CASTLE INTL is 7.38 times less risky than Sun Country. The bond trades about -0.12 of its potential returns per unit of risk. The Sun Country Airlines is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  993.00  in Sun Country Airlines on October 7, 2024 and sell it today you would earn a total of  440.00  from holding Sun Country Airlines or generate 44.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

CROWN CASTLE INTL  vs.  Sun Country Airlines

CROWN CASTLE INTL

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sun Country Airlines

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Country Airlines are ranked lower than 14 (%) 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.

Pair Trading with CROWN and Sun Country

The main advantage of trading using opposite CROWN and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CROWN 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 CROWN CASTLE INTL 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.