Correlation Between Zoomcar Holdings and Sun Country

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

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

Diversification Opportunities for Zoomcar Holdings and Sun Country

0.25

Correlation Coefficient

Zoomcar Holdings  Sun Country

Modest diversification

The 3 months correlation between Zoomcar and Sun is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Zoomcar Holdings 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 Zoomcar Holdings 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 Zoomcar Holdings 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 Zoomcar Holdings i.e., Zoomcar Holdings and Sun Country go up and down completely randomly.

Pair Corralation between Zoomcar Holdings and Sun Country

Assuming the 90 days horizon Zoomcar Holdings is expected to generate 4.42 times more return on investment than Sun Country. However, Zoomcar Holdings is 4.42 times more volatile than Sun Country Airlines. It trades about 0.0 of its potential returns per unit of risk. Sun Country Airlines is currently generating about -0.1 per unit of risk. If you would invest  1.80  in Zoomcar Holdings on December 5, 2024 and sell it today you would lose (0.32) from holding Zoomcar Holdings or give up 17.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Zoomcar Holdings  vs.  Sun Country Airlines

Zoomcar Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zoomcar Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Zoomcar Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Sun Country Airlines

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Country Airlines are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, Sun Country may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Zoomcar Holdings and Sun Country

The main advantage of trading using opposite Zoomcar Holdings and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoomcar Holdings 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 Zoomcar Holdings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.