Correlation Between JetBlue Airways and HomesToLife
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and HomesToLife 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 HomesToLife 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 HomesToLife, you can compare the effects of market volatilities on JetBlue Airways and HomesToLife 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 HomesToLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and HomesToLife.
Diversification Opportunities for JetBlue Airways and HomesToLife
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JetBlue and HomesToLife is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and HomesToLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomesToLife 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 HomesToLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomesToLife has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and HomesToLife go up and down completely randomly.
Pair Corralation between JetBlue Airways and HomesToLife
Given the investment horizon of 90 days JetBlue Airways is expected to generate 5.64 times less return on investment than HomesToLife. But when comparing it to its historical volatility, JetBlue Airways Corp is 2.55 times less risky than HomesToLife. It trades about 0.06 of its potential returns per unit of risk. HomesToLife is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 402.00 in HomesToLife on November 3, 2024 and sell it today you would earn a total of 474.00 from holding HomesToLife or generate 117.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 68.0% |
| Values | Daily Returns |
JetBlue Airways Corp vs. HomesToLife
Performance |
| Timeline |
| JetBlue Airways Corp |
| HomesToLife |
JetBlue Airways and HomesToLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JetBlue Airways and HomesToLife
The main advantage of trading using opposite JetBlue Airways and HomesToLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, HomesToLife 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 HomesToLife will offset losses from the drop in HomesToLife'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 |
| HomesToLife vs. Hyatt Hotels | HomesToLife vs. Macys Inc | HomesToLife vs. 1StdibsCom | HomesToLife vs. AutoNation |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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