Correlation Between Western Asset and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Investment and JetBlue Airways Corp, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and JetBlue Airways.
Diversification Opportunities for Western Asset and JetBlue Airways
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and JetBlue is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Investment 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 Western Asset 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 Western Asset Investment 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 Western Asset i.e., Western Asset and JetBlue Airways go up and down completely randomly.
Pair Corralation between Western Asset and JetBlue Airways
Considering the 90-day investment horizon Western Asset Investment is expected to under-perform the JetBlue Airways. But the stock apears to be less risky and, when comparing its historical volatility, Western Asset Investment is 8.05 times less risky than JetBlue Airways. The stock trades about -0.02 of its potential returns per unit of risk. The JetBlue Airways Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 570.00 in JetBlue Airways Corp on September 1, 2024 and sell it today you would earn a total of 27.00 from holding JetBlue Airways Corp or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Investment vs. JetBlue Airways Corp
Performance |
| Timeline |
| Western Asset Investment |
| JetBlue Airways Corp |
Western Asset and JetBlue Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and JetBlue Airways
The main advantage of trading using opposite Western Asset and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Visa Class A | Western Asset vs. Diamond Hill Investment | Western Asset vs. Distoken Acquisition | Western Asset vs. Associated Capital Group |
| JetBlue Airways vs. Canadian Pacific Railway | JetBlue Airways vs. Volaris | JetBlue Airways vs. Werner Enterprises | JetBlue Airways vs. Canadian National Railway |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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