Correlation Between GMxico Transportes and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both GMxico Transportes 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 GMxico Transportes and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMxico Transportes SAB and JetBlue Airways, you can compare the effects of market volatilities on GMxico Transportes 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 GMxico Transportes with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMxico Transportes and JetBlue Airways.
Diversification Opportunities for GMxico Transportes and JetBlue Airways
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between GMxico and JetBlue is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding GMxico Transportes SAB and JetBlue Airways in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JetBlue Airways and GMxico Transportes 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 GMxico Transportes SAB 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 GMxico Transportes i.e., GMxico Transportes and JetBlue Airways go up and down completely randomly.
Pair Corralation between GMxico Transportes and JetBlue Airways
Assuming the 90 days trading horizon GMxico Transportes SAB is expected to generate 0.25 times more return on investment than JetBlue Airways. However, GMxico Transportes SAB is 3.98 times less risky than JetBlue Airways. It trades about -0.09 of its potential returns per unit of risk. JetBlue Airways is currently generating about -0.12 per unit of risk. If you would invest 3,202 in GMxico Transportes SAB on November 3, 2024 and sell it today you would lose (96.00) from holding GMxico Transportes SAB or give up 3.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GMxico Transportes SAB vs. JetBlue Airways
Performance |
| Timeline |
| GMxico Transportes SAB |
| JetBlue Airways |
GMxico Transportes and JetBlue Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMxico Transportes and JetBlue Airways
The main advantage of trading using opposite GMxico Transportes and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMxico Transportes 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.| GMxico Transportes vs. Verizon Communications | GMxico Transportes vs. Desarrolladora Homex SAB | GMxico Transportes vs. Micron Technology | GMxico Transportes vs. Prudential Financial |
| JetBlue Airways vs. McEwen Mining | JetBlue Airways vs. KB Home | JetBlue Airways vs. Southern Copper | JetBlue Airways vs. Desarrolladora Homex SAB |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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