Correlation Between JetBlue Airways and International Consolidated
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and International Consolidated 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 International Consolidated 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 International Consolidated Airlines, you can compare the effects of market volatilities on JetBlue Airways and International Consolidated 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 International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and International Consolidated.
Diversification Opportunities for JetBlue Airways and International Consolidated
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between JetBlue and International is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated 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 International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and International Consolidated go up and down completely randomly.
Pair Corralation between JetBlue Airways and International Consolidated
Given the investment horizon of 90 days JetBlue Airways Corp is expected to under-perform the International Consolidated. But the stock apears to be less risky and, when comparing its historical volatility, JetBlue Airways Corp is 1.1 times less risky than International Consolidated. The stock trades about -0.13 of its potential returns per unit of risk. The International Consolidated Airlines is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 261.00 in International Consolidated Airlines on August 27, 2024 and sell it today you would earn a total of 24.00 from holding International Consolidated Airlines or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JetBlue Airways Corp vs. International Consolidated Air
Performance |
| Timeline |
| JetBlue Airways Corp |
| International Consolidated |
JetBlue Airways and International Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JetBlue Airways and International Consolidated
The main advantage of trading using opposite JetBlue Airways and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, International Consolidated 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 International Consolidated will offset losses from the drop in International Consolidated's long position.| JetBlue Airways vs. Frontier Group Holdings | JetBlue Airways vs. Southwest Airlines | JetBlue Airways vs. United Airlines Holdings | JetBlue Airways vs. American Airlines Group |
| International Consolidated vs. Air China Limited | International Consolidated vs. China Southern Airlines |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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