Correlation Between Canadian National and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both Canadian National 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 Canadian National and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian National Railway and JetBlue Airways Corp, you can compare the effects of market volatilities on Canadian National 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 Canadian National with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian National and JetBlue Airways.
Diversification Opportunities for Canadian National and JetBlue Airways
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canadian and JetBlue is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Canadian National Railway and JetBlue Airways Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JetBlue Airways Corp and Canadian National 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 Canadian National Railway 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 Corp has no effect on the direction of Canadian National i.e., Canadian National and JetBlue Airways go up and down completely randomly.
Pair Corralation between Canadian National and JetBlue Airways
Considering the 90-day investment horizon Canadian National Railway is expected to generate 0.33 times more return on investment than JetBlue Airways. However, Canadian National Railway is 3.06 times less risky than JetBlue Airways. It trades about 0.03 of its potential returns per unit of risk. JetBlue Airways Corp is currently generating about 0.0 per unit of risk. If you would invest 11,029 in Canadian National Railway on August 30, 2024 and sell it today you would earn a total of 97.00 from holding Canadian National Railway or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian National Railway vs. JetBlue Airways Corp
Performance |
| Timeline |
| Canadian National Railway |
| JetBlue Airways Corp |
Canadian National and JetBlue Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian National and JetBlue Airways
The main advantage of trading using opposite Canadian National and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian National 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.| Canadian National vs. Union Pacific | Canadian National vs. CSX Corporation | Canadian National vs. Norfolk Southern | Canadian National vs. Westinghouse Air Brake |
| JetBlue Airways vs. American Airlines Group | JetBlue Airways vs. Southwest Airlines | JetBlue Airways vs. Frontier Group Holdings |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |