Correlation Between JetBlue Airways and Marten Transport
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and Marten Transport 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 Marten Transport 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 Marten Transport, you can compare the effects of market volatilities on JetBlue Airways and Marten Transport 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 Marten Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and Marten Transport.
Diversification Opportunities for JetBlue Airways and Marten Transport
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JetBlue and Marten is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Marten Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marten Transport 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 Marten Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marten Transport has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Marten Transport go up and down completely randomly.
Pair Corralation between JetBlue Airways and Marten Transport
Given the investment horizon of 90 days JetBlue Airways Corp is expected to under-perform the Marten Transport. In addition to that, JetBlue Airways is 3.22 times more volatile than Marten Transport. It trades about -0.06 of its total potential returns per unit of risk. Marten Transport is currently generating about 0.01 per unit of volatility. If you would invest 1,541 in Marten Transport on November 3, 2024 and sell it today you would lose (1.00) from holding Marten Transport or give up 0.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JetBlue Airways Corp vs. Marten Transport
Performance |
| Timeline |
| JetBlue Airways Corp |
| Marten Transport |
JetBlue Airways and Marten Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JetBlue Airways and Marten Transport
The main advantage of trading using opposite JetBlue Airways and Marten Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, Marten Transport 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 Marten Transport will offset losses from the drop in Marten Transport'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 |
| Marten Transport vs. Werner Enterprises | Marten Transport vs. Covenant Logistics Group, | Marten Transport vs. Universal Logistics Holdings | Marten Transport vs. Schneider National |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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