Correlation Between JetBlue Airways and Western Acquisition
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and Western Acquisition 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 Western Acquisition 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 Western Acquisition Ventures, you can compare the effects of market volatilities on JetBlue Airways and Western Acquisition 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 Western Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and Western Acquisition.
Diversification Opportunities for JetBlue Airways and Western Acquisition
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between JetBlue and Western is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Western Acquisition Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Acquisition 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 Western Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Acquisition has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Western Acquisition go up and down completely randomly.
Pair Corralation between JetBlue Airways and Western Acquisition
Given the investment horizon of 90 days JetBlue Airways Corp is expected to generate 3.27 times more return on investment than Western Acquisition. However, JetBlue Airways is 3.27 times more volatile than Western Acquisition Ventures. It trades about 0.02 of its potential returns per unit of risk. Western Acquisition Ventures is currently generating about 0.0 per unit of risk. If you would invest 713.00 in JetBlue Airways Corp on September 24, 2024 and sell it today you would earn a total of 31.00 from holding JetBlue Airways Corp or generate 4.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
JetBlue Airways Corp vs. Western Acquisition Ventures
Performance |
Timeline |
JetBlue Airways Corp |
Western Acquisition |
JetBlue Airways and Western Acquisition Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JetBlue Airways and Western Acquisition
The main advantage of trading using opposite JetBlue Airways and Western Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, Western Acquisition 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 Western Acquisition will offset losses from the drop in Western Acquisition's long position.JetBlue Airways vs. Frontier Group Holdings | JetBlue Airways vs. Southwest Airlines | JetBlue Airways vs. United Airlines Holdings | JetBlue Airways vs. American Airlines Group |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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