Correlation Between JetBlue Airways and Drive Shack
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and Drive Shack 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 Drive Shack 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 Drive Shack, you can compare the effects of market volatilities on JetBlue Airways and Drive Shack 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 Drive Shack. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and Drive Shack.
Diversification Opportunities for JetBlue Airways and Drive Shack
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JetBlue and Drive is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Drive Shack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Drive Shack 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 Drive Shack. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Drive Shack has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Drive Shack go up and down completely randomly.
Pair Corralation between JetBlue Airways and Drive Shack
If you would invest 550.00 in JetBlue Airways Corp on September 3, 2024 and sell it today you would earn a total of 47.00 from holding JetBlue Airways Corp or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.8% |
| Values | Daily Returns |
JetBlue Airways Corp vs. Drive Shack
Performance |
| Timeline |
| JetBlue Airways Corp |
| Drive Shack |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
JetBlue Airways and Drive Shack Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JetBlue Airways and Drive Shack
The main advantage of trading using opposite JetBlue Airways and Drive Shack positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, Drive Shack 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 Drive Shack will offset losses from the drop in Drive Shack's long position.| JetBlue Airways vs. Copa Holdings SA | JetBlue Airways vs. SkyWest | JetBlue Airways vs. Air Transport Services | JetBlue Airways vs. Mesa Air Group |
| Drive Shack vs. Bausch Lomb Corp | Drive Shack vs. Nike Inc | Drive Shack vs. National Vision Holdings | Drive Shack vs. Nyxoah |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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