Correlation Between JetBlue Airways and Frontier Group
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and Frontier Group 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 Frontier Group 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 Frontier Group Holdings, you can compare the effects of market volatilities on JetBlue Airways and Frontier Group 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 Frontier Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and Frontier Group.
Diversification Opportunities for JetBlue Airways and Frontier Group
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between JetBlue and Frontier is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Frontier Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontier Group Holdings 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 Frontier Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontier Group Holdings has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Frontier Group go up and down completely randomly.
Pair Corralation between JetBlue Airways and Frontier Group
Given the investment horizon of 90 days JetBlue Airways is expected to generate 3.98 times less return on investment than Frontier Group. In addition to that, JetBlue Airways is 1.04 times more volatile than Frontier Group Holdings. It trades about 0.05 of its total potential returns per unit of risk. Frontier Group Holdings is currently generating about 0.19 per unit of volatility. If you would invest 555.00 in Frontier Group Holdings on November 18, 2024 and sell it today you would earn a total of 330.00 from holding Frontier Group Holdings or generate 59.46% 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. Frontier Group Holdings
Performance |
| Timeline |
| JetBlue Airways Corp |
| Frontier Group Holdings |
JetBlue Airways and Frontier Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JetBlue Airways and Frontier Group
The main advantage of trading using opposite JetBlue Airways and Frontier Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, Frontier Group 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 Frontier Group will offset losses from the drop in Frontier Group'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 |
| Frontier Group vs. JetBlue Airways Corp | Frontier Group vs. Southwest Airlines | Frontier Group vs. United Airlines Holdings | Frontier Group vs. American Airlines 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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