Correlation Between JetBlue Airways and Liberty International
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and Liberty International 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 Liberty International 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 Liberty International Holding, you can compare the effects of market volatilities on JetBlue Airways and Liberty International 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 Liberty International. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and Liberty International.
Diversification Opportunities for JetBlue Airways and Liberty International
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between JetBlue and Liberty is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Liberty International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty International 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 Liberty International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty International has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Liberty International go up and down completely randomly.
Pair Corralation between JetBlue Airways and Liberty International
Given the investment horizon of 90 days JetBlue Airways Corp is expected to under-perform the Liberty International. But the stock apears to be less risky and, when comparing its historical volatility, JetBlue Airways Corp is 7.82 times less risky than Liberty International. The stock trades about -0.15 of its potential returns per unit of risk. The Liberty International Holding is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.02 in Liberty International Holding on August 29, 2024 and sell it today you would lose (0.01) from holding Liberty International Holding or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JetBlue Airways Corp vs. Liberty International Holding
Performance |
| Timeline |
| JetBlue Airways Corp |
| Liberty International |
JetBlue Airways and Liberty International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JetBlue Airways and Liberty International
The main advantage of trading using opposite JetBlue Airways and Liberty International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, Liberty International 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 Liberty International will offset losses from the drop in Liberty International'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 |
| Liberty International vs. National Beverage Corp | Liberty International vs. Vita Coco | Liberty International vs. Hill Street Beverage | Liberty International vs. Alkame Holdings |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |