Correlation Between Grupo Industrial and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both Grupo Industrial and JetBlue Airways 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 Grupo Industrial and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Industrial Saltillo and JetBlue Airways, you can compare the effects of market volatilities on Grupo Industrial and JetBlue Airways 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 Grupo Industrial with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Industrial and JetBlue Airways.
Diversification Opportunities for Grupo Industrial and JetBlue Airways
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and JetBlue is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Industrial Saltillo and JetBlue Airways in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JetBlue Airways and Grupo Industrial 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 Grupo Industrial Saltillo are associated (or correlated) with JetBlue Airways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JetBlue Airways has no effect on the direction of Grupo Industrial i.e., Grupo Industrial and JetBlue Airways go up and down completely randomly.
Pair Corralation between Grupo Industrial and JetBlue Airways
Assuming the 90 days trading horizon Grupo Industrial Saltillo is expected to under-perform the JetBlue Airways. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Industrial Saltillo is 6.02 times less risky than JetBlue Airways. The stock trades about -0.15 of its potential returns per unit of risk. The JetBlue Airways is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 12,116 in JetBlue Airways on October 9, 2024 and sell it today you would earn a total of 4,644 from holding JetBlue Airways or generate 38.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Grupo Industrial Saltillo vs. JetBlue Airways
Performance |
Timeline |
Grupo Industrial Saltillo |
JetBlue Airways |
Grupo Industrial and JetBlue Airways Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Grupo Industrial and JetBlue Airways
The main advantage of trading using opposite Grupo Industrial and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Industrial position performs unexpectedly, JetBlue Airways 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 JetBlue Airways will offset losses from the drop in JetBlue Airways' long position.Grupo Industrial vs. Grupo Aeroportuario del | Grupo Industrial vs. Grupo Aeroportuario del | Grupo Industrial vs. Gruma SAB de | Grupo Industrial vs. Grupo Financiero Banorte |
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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.
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