Correlation Between 887315BN8 and Sun Country

Can any of the company-specific risk be diversified away by investing in both 887315BN8 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 887315BN8 and Sun Country into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TIME WARNER INC and Sun Country Airlines, you can compare the effects of market volatilities on 887315BN8 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 887315BN8 with a short position of Sun Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of 887315BN8 and Sun Country.

Diversification Opportunities for 887315BN8 and Sun Country

0.18

Correlation Coefficient

887315BN8  Sun Country

Average diversification

The 3 months correlation between 887315BN8 and Sun is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding TIME WARNER INC 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 887315BN8 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 TIME WARNER INC 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 887315BN8 i.e., 887315BN8 and Sun Country go up and down completely randomly.

Pair Corralation between 887315BN8 and Sun Country

Assuming the 90 days trading horizon TIME WARNER INC is expected to under-perform the Sun Country. But the bond apears to be less risky and, when comparing its historical volatility, TIME WARNER INC is 2.26 times less risky than Sun Country. The bond trades about -0.36 of its potential returns per unit of risk. The Sun Country Airlines is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,432  in Sun Country Airlines on October 7, 2024 and sell it today you would earn a total of  1.00  from holding Sun Country Airlines or generate 0.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	55.0%
Values	Daily Returns

TIME WARNER INC  vs.  Sun Country Airlines

TIME WARNER INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TIME WARNER INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for TIME WARNER INC 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 887315BN8 and Sun Country

The main advantage of trading using opposite 887315BN8 and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 887315BN8 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 TIME WARNER INC 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 Stocks Directory module to find actively traded stocks across global markets.