Correlation Between JetBlue Airways and UTStarcom Holdings
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and UTStarcom Holdings 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 UTStarcom Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JetBlue Airways and UTStarcom Holdings Corp, you can compare the effects of market volatilities on JetBlue Airways and UTStarcom Holdings 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 UTStarcom Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and UTStarcom Holdings.
Diversification Opportunities for JetBlue Airways and UTStarcom Holdings
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JetBlue and UTStarcom is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways and UTStarcom Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UTStarcom Holdings Corp 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 are associated (or correlated) with UTStarcom Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UTStarcom Holdings Corp has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and UTStarcom Holdings go up and down completely randomly.
Pair Corralation between JetBlue Airways and UTStarcom Holdings
Assuming the 90 days trading horizon JetBlue Airways is expected to generate 1.53 times more return on investment than UTStarcom Holdings. However, JetBlue Airways is 1.53 times more volatile than UTStarcom Holdings Corp. It trades about 0.01 of its potential returns per unit of risk. UTStarcom Holdings Corp is currently generating about -0.02 per unit of risk. If you would invest 15,000 in JetBlue Airways on August 30, 2024 and sell it today you would lose (2,884) from holding JetBlue Airways or give up 19.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JetBlue Airways vs. UTStarcom Holdings Corp
Performance |
| Timeline |
| JetBlue Airways |
| UTStarcom Holdings Corp |
JetBlue Airways and UTStarcom Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JetBlue Airways and UTStarcom Holdings
The main advantage of trading using opposite JetBlue Airways and UTStarcom Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, UTStarcom Holdings 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 UTStarcom Holdings will offset losses from the drop in UTStarcom Holdings' long position.| JetBlue Airways vs. KB Home | JetBlue Airways vs. GMxico Transportes SAB | JetBlue Airways vs. Applied Materials | JetBlue Airways vs. CVS Health |
| UTStarcom Holdings vs. Taiwan Semiconductor Manufacturing | UTStarcom Holdings vs. Micron Technology | UTStarcom Holdings vs. Southern Copper | UTStarcom Holdings vs. McEwen Mining |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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