Correlation Between JetBlue Airways and Natural Alternatives
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and Natural Alternatives 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 Natural Alternatives 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 Natural Alternatives International, you can compare the effects of market volatilities on JetBlue Airways and Natural Alternatives 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 Natural Alternatives. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and Natural Alternatives.
Diversification Opportunities for JetBlue Airways and Natural Alternatives
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JetBlue and Natural is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Natural Alternatives Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Alternatives 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 Natural Alternatives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Alternatives has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Natural Alternatives go up and down completely randomly.
Pair Corralation between JetBlue Airways and Natural Alternatives
Given the investment horizon of 90 days JetBlue Airways Corp is expected to generate 1.49 times more return on investment than Natural Alternatives. However, JetBlue Airways is 1.49 times more volatile than Natural Alternatives International. It trades about 0.07 of its potential returns per unit of risk. Natural Alternatives International is currently generating about 0.06 per unit of risk. If you would invest 570.00 in JetBlue Airways Corp on September 1, 2024 and sell it today you would earn a total of 27.00 from holding JetBlue Airways Corp or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JetBlue Airways Corp vs. Natural Alternatives Internati
Performance |
| Timeline |
| JetBlue Airways Corp |
| Natural Alternatives |
JetBlue Airways and Natural Alternatives Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JetBlue Airways and Natural Alternatives
The main advantage of trading using opposite JetBlue Airways and Natural Alternatives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, Natural Alternatives 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 Natural Alternatives will offset losses from the drop in Natural Alternatives' long position.| JetBlue Airways vs. Canadian Pacific Railway | JetBlue Airways vs. Werner Enterprises | JetBlue Airways vs. Canadian National Railway | JetBlue Airways vs. CSX Corporation |
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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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