Correlation Between JetBlue Airways and Sun Country
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and Sun Country 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 Sun Country 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 Sun Country Airlines, you can compare the effects of market volatilities on JetBlue Airways and Sun Country 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 Sun Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and Sun Country.
Diversification Opportunities for JetBlue Airways and Sun Country
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between JetBlue and Sun is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Sun Country Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Country Airlines 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 Sun Country. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Country Airlines has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Sun Country go up and down completely randomly.
Pair Corralation between JetBlue Airways and Sun Country
Given the investment horizon of 90 days JetBlue Airways Corp is expected to under-perform the Sun Country. In addition to that, JetBlue Airways is 1.41 times more volatile than Sun Country Airlines. It trades about -0.12 of its total potential returns per unit of risk. Sun Country Airlines is currently generating about 0.12 per unit of volatility. If you would invest 1,275 in Sun Country Airlines on August 23, 2024 and sell it today you would earn a total of 116.00 from holding Sun Country Airlines or generate 9.1% 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. Sun Country Airlines
Performance |
| Timeline |
| JetBlue Airways Corp |
| Sun Country Airlines |
JetBlue Airways and Sun Country Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JetBlue Airways and Sun Country
The main advantage of trading using opposite JetBlue Airways and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, Sun Country 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 Sun Country will offset losses from the drop in Sun Country'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 |
| Sun Country vs. Spirit Airlines | Sun Country vs. JetBlue Airways Corp | Sun Country vs. Allegiant Travel | Sun Country vs. Copa Holdings SA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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