Correlation Between SUMIBK and Sun Country

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

By analyzing existing cross correlation between SUMIBK 5766 13 JAN 33 and Sun Country Airlines, you can compare the effects of market volatilities on SUMIBK 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 SUMIBK with a short position of Sun Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUMIBK and Sun Country.

Diversification Opportunities for SUMIBK and Sun Country

-0.41

Correlation Coefficient

SUMIBK  Sun Country

Very good diversification

The 3 months correlation between SUMIBK and Sun is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding SUMIBK 5766 13 JAN 33 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 SUMIBK 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 SUMIBK 5766 13 JAN 33 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 SUMIBK i.e., SUMIBK and Sun Country go up and down completely randomly.

Pair Corralation between SUMIBK and Sun Country

Assuming the 90 days trading horizon SUMIBK 5766 13 JAN 33 is expected to generate 0.12 times more return on investment than Sun Country. However, SUMIBK 5766 13 JAN 33 is 8.11 times less risky than Sun Country. It trades about 0.02 of its potential returns per unit of risk. Sun Country Airlines is currently generating about -0.04 per unit of risk. If you would invest  10,321  in SUMIBK 5766 13 JAN 33 on December 29, 2024 and sell it today you would earn a total of  41.00  from holding SUMIBK 5766 13 JAN 33 or generate 0.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	83.61%
Values	Daily Returns

SUMIBK 5766 13 JAN 33  vs.  Sun Country Airlines

SUMIBK 5766 13

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SUMIBK 5766 13 JAN 33 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SUMIBK 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

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 SUMIBK and Sun Country

The main advantage of trading using opposite SUMIBK and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUMIBK 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 SUMIBK 5766 13 JAN 33 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.

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.