Correlation Between Sun Country and EnVVeno Medical

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

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

Diversification Opportunities for Sun Country and EnVVeno Medical

-0.37

Correlation Coefficient

Sun Country  EnVVeno Medical

Very good diversification

The 3 months correlation between Sun and EnVVeno is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and enVVeno Medical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enVVeno Medical Corp and Sun Country 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 Sun Country Airlines are associated (or correlated) with EnVVeno Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enVVeno Medical Corp has no effect on the direction of Sun Country i.e., Sun Country and EnVVeno Medical go up and down completely randomly.

Pair Corralation between Sun Country and EnVVeno Medical

Given the investment horizon of 90 days Sun Country Airlines is expected to generate 0.77 times more return on investment than EnVVeno Medical. However, Sun Country Airlines is 1.3 times less risky than EnVVeno Medical. It trades about 0.16 of its potential returns per unit of risk. enVVeno Medical Corp is currently generating about -0.19 per unit of risk. If you would invest  1,076  in Sun Country Airlines on September 15, 2024 and sell it today you would earn a total of  418.00  from holding Sun Country Airlines or generate 38.85% return on investment over 90 days.

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

Sun Country Airlines  vs.  enVVeno Medical Corp

Sun Country Airlines

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Country Airlines are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental indicators, Sun Country showed solid returns over the last few months and may actually be approaching a breakup point.

enVVeno Medical Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days enVVeno Medical Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Sun Country and EnVVeno Medical

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

The idea behind Sun Country Airlines and enVVeno Medical Corp 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.