Correlation Between JetBlue Airways and Lionsgate Studios
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and Lionsgate Studios 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 Lionsgate Studios 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 Lionsgate Studios Corp, you can compare the effects of market volatilities on JetBlue Airways and Lionsgate Studios 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 Lionsgate Studios. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and Lionsgate Studios.
Diversification Opportunities for JetBlue Airways and Lionsgate Studios
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between JetBlue and Lionsgate is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Lionsgate Studios Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lionsgate Studios 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 Corp are associated (or correlated) with Lionsgate Studios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lionsgate Studios Corp has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Lionsgate Studios go up and down completely randomly.
Pair Corralation between JetBlue Airways and Lionsgate Studios
Given the investment horizon of 90 days JetBlue Airways Corp is expected to generate 1.85 times more return on investment than Lionsgate Studios. However, JetBlue Airways is 1.85 times more volatile than Lionsgate Studios Corp. It trades about 0.07 of its potential returns per unit of risk. Lionsgate Studios Corp is currently generating about 0.04 per unit of risk. If you would invest 699.00 in JetBlue Airways Corp on October 24, 2024 and sell it today you would earn a total of 97.00 from holding JetBlue Airways Corp or generate 13.88% 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. Lionsgate Studios Corp
Performance |
| Timeline |
| JetBlue Airways Corp |
| Lionsgate Studios Corp |
JetBlue Airways and Lionsgate Studios Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JetBlue Airways and Lionsgate Studios
The main advantage of trading using opposite JetBlue Airways and Lionsgate Studios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, Lionsgate Studios 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 Lionsgate Studios will offset losses from the drop in Lionsgate Studios' 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 |
| Lionsgate Studios vs. Noble plc | Lionsgate Studios vs. Nok Airlines Public | Lionsgate Studios vs. International Consolidated Airlines | Lionsgate Studios vs. JetBlue Airways Corp |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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