Correlation Between JetBlue Airways and Awilco Drilling
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and Awilco Drilling 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 Awilco Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JetBlue Airways Corp and Awilco Drilling PLC, you can compare the effects of market volatilities on JetBlue Airways and Awilco Drilling 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 Awilco Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and Awilco Drilling.
Diversification Opportunities for JetBlue Airways and Awilco Drilling
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between JetBlue and Awilco is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Awilco Drilling PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awilco Drilling PLC 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 Corp are associated (or correlated) with Awilco Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awilco Drilling PLC has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Awilco Drilling go up and down completely randomly.
Pair Corralation between JetBlue Airways and Awilco Drilling
Given the investment horizon of 90 days JetBlue Airways Corp is expected to generate 7.59 times more return on investment than Awilco Drilling. However, JetBlue Airways is 7.59 times more volatile than Awilco Drilling PLC. It trades about 0.0 of its potential returns per unit of risk. Awilco Drilling PLC is currently generating about -0.21 per unit of risk. If you would invest 607.00 in JetBlue Airways Corp on August 30, 2024 and sell it today you would lose (11.00) from holding JetBlue Airways Corp or give up 1.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
JetBlue Airways Corp vs. Awilco Drilling PLC
Performance |
| Timeline |
| JetBlue Airways Corp |
| Awilco Drilling PLC |
JetBlue Airways and Awilco Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JetBlue Airways and Awilco Drilling
The main advantage of trading using opposite JetBlue Airways and Awilco Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, Awilco Drilling 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 Awilco Drilling will offset losses from the drop in Awilco Drilling's long position.The idea behind JetBlue Airways Corp and Awilco Drilling PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Awilco Drilling vs. Noble plc | Awilco Drilling vs. Transocean | Awilco Drilling vs. Helmerich and Payne | Awilco Drilling vs. Patterson UTI Energy |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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