Correlation Between Gol Linhas and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both Gol Linhas 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 Gol Linhas and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gol Linhas Aereas and JetBlue Airways Corp, you can compare the effects of market volatilities on Gol Linhas 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 Gol Linhas with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gol Linhas and JetBlue Airways.
Diversification Opportunities for Gol Linhas and JetBlue Airways
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gol and JetBlue is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Gol Linhas Aereas 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 Gol Linhas 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 Gol Linhas Aereas 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 Gol Linhas i.e., Gol Linhas and JetBlue Airways go up and down completely randomly.
Pair Corralation between Gol Linhas and JetBlue Airways
Considering the 90-day investment horizon Gol Linhas Aereas is expected to generate 1.39 times more return on investment than JetBlue Airways. However, Gol Linhas is 1.39 times more volatile than JetBlue Airways Corp. It trades about 0.07 of its potential returns per unit of risk. JetBlue Airways Corp is currently generating about 0.01 per unit of risk. If you would invest 290.00 in Gol Linhas Aereas on August 24, 2024 and sell it today you would earn a total of 148.00 from holding Gol Linhas Aereas or generate 51.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 32.12% |
| Values | Daily Returns |
Gol Linhas Aereas vs. JetBlue Airways Corp
Performance |
| Timeline |
| Gol Linhas Aereas |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| JetBlue Airways Corp |
Gol Linhas and JetBlue Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gol Linhas and JetBlue Airways
The main advantage of trading using opposite Gol Linhas and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gol Linhas 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.| Gol Linhas vs. Azul SA | Gol Linhas vs. Air France KLM | Gol Linhas vs. Copa Holdings SA | Gol Linhas vs. International Consolidated Airlines |
| JetBlue Airways vs. Frontier Group Holdings | JetBlue Airways vs. Southwest Airlines | JetBlue Airways vs. United Airlines Holdings | JetBlue Airways vs. American Airlines Group |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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