Correlation Between JetBlue Airways and Ross Stores
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and Ross Stores 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 Ross Stores 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 Ross Stores, you can compare the effects of market volatilities on JetBlue Airways and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and Ross Stores.
Diversification Opportunities for JetBlue Airways and Ross Stores
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between JetBlue and Ross is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Ross Stores go up and down completely randomly.
Pair Corralation between JetBlue Airways and Ross Stores
Given the investment horizon of 90 days JetBlue Airways is expected to generate 1.69 times less return on investment than Ross Stores. In addition to that, JetBlue Airways is 3.38 times more volatile than Ross Stores. It trades about 0.01 of its total potential returns per unit of risk. Ross Stores is currently generating about 0.06 per unit of volatility. If you would invest 14,694 in Ross Stores on September 19, 2024 and sell it today you would earn a total of 460.50 from holding Ross Stores or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JetBlue Airways Corp vs. Ross Stores
Performance |
| Timeline |
| JetBlue Airways Corp |
| Ross Stores |
JetBlue Airways and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JetBlue Airways and Ross Stores
The main advantage of trading using opposite JetBlue Airways and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' 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 |
| Ross Stores vs. Capri Holdings | Ross Stores vs. Movado Group | Ross Stores vs. Tapestry | Ross Stores vs. Brilliant Earth Group |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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