Correlation Between JetBlue Airways and New Era
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and New Era 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 JetBlue Airways and New Era into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JetBlue Airways Corp and New Era Helium, you can compare the effects of market volatilities on JetBlue Airways and New Era 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 JetBlue Airways with a short position of New Era. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and New Era.
Diversification Opportunities for JetBlue Airways and New Era
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JetBlue and New is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and New Era Helium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Era Helium and JetBlue Airways 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 JetBlue Airways Corp are associated (or correlated) with New Era. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Era Helium has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and New Era go up and down completely randomly.
Pair Corralation between JetBlue Airways and New Era
Given the investment horizon of 90 days JetBlue Airways Corp is expected to generate 0.79 times more return on investment than New Era. However, JetBlue Airways Corp is 1.27 times less risky than New Era. It trades about 0.07 of its potential returns per unit of risk. New Era Helium is currently generating about -0.15 per unit of risk. If you would invest 590.00 in JetBlue Airways Corp on September 25, 2024 and sell it today you would earn a total of 184.00 from holding JetBlue Airways Corp or generate 31.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.21% |
Values | Daily Returns |
JetBlue Airways Corp vs. New Era Helium
Performance |
Timeline |
JetBlue Airways Corp |
New Era Helium |
JetBlue Airways and New Era Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JetBlue Airways and New Era
The main advantage of trading using opposite JetBlue Airways and New Era positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, New Era 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 New Era will offset losses from the drop in New Era's long position.The idea behind JetBlue Airways Corp and New Era Helium 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.New Era vs. Alaska Air Group | New Era vs. Ambev SA ADR | New Era vs. JetBlue Airways Corp | New Era vs. Westrock Coffee |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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