Correlation Between JetBlue Airways and Sabra Healthcare
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and Sabra Healthcare 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 Sabra Healthcare 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 Sabra Healthcare REIT, you can compare the effects of market volatilities on JetBlue Airways and Sabra Healthcare 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 Sabra Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and Sabra Healthcare.
Diversification Opportunities for JetBlue Airways and Sabra Healthcare
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between JetBlue and Sabra is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Sabra Healthcare REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabra Healthcare REIT 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 Sabra Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabra Healthcare REIT has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Sabra Healthcare go up and down completely randomly.
Pair Corralation between JetBlue Airways and Sabra Healthcare
Given the investment horizon of 90 days JetBlue Airways Corp is expected to generate 2.85 times more return on investment than Sabra Healthcare. However, JetBlue Airways is 2.85 times more volatile than Sabra Healthcare REIT. It trades about 0.08 of its potential returns per unit of risk. Sabra Healthcare REIT is currently generating about 0.12 per unit of risk. If you would invest 502.00 in JetBlue Airways Corp on September 2, 2024 and sell it today you would earn a total of 95.00 from holding JetBlue Airways Corp or generate 18.92% 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. Sabra Healthcare REIT
Performance |
| Timeline |
| JetBlue Airways Corp |
| Sabra Healthcare REIT |
JetBlue Airways and Sabra Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JetBlue Airways and Sabra Healthcare
The main advantage of trading using opposite JetBlue Airways and Sabra Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, Sabra Healthcare 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 Sabra Healthcare will offset losses from the drop in Sabra Healthcare'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 |
| Sabra Healthcare vs. Healthcare Realty Trust | Sabra Healthcare vs. Healthpeak Properties | Sabra Healthcare vs. Community Healthcare Trust | Sabra Healthcare vs. Universal Health Realty |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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