Correlation Between JetBlue Airways and Whitbread Plc
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and Whitbread Plc 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 Whitbread Plc 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 Whitbread plc, you can compare the effects of market volatilities on JetBlue Airways and Whitbread Plc 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 Whitbread Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and Whitbread Plc.
Diversification Opportunities for JetBlue Airways and Whitbread Plc
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between JetBlue and Whitbread is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Whitbread plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitbread plc 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 Whitbread Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitbread plc has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Whitbread Plc go up and down completely randomly.
Pair Corralation between JetBlue Airways and Whitbread Plc
Given the investment horizon of 90 days JetBlue Airways Corp is expected to generate 1.29 times more return on investment than Whitbread Plc. However, JetBlue Airways is 1.29 times more volatile than Whitbread plc. It trades about 0.16 of its potential returns per unit of risk. Whitbread plc is currently generating about -0.22 per unit of risk. If you would invest 632.00 in JetBlue Airways Corp on September 13, 2024 and sell it today you would earn a total of 98.00 from holding JetBlue Airways Corp or generate 15.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
JetBlue Airways Corp vs. Whitbread plc
Performance |
| Timeline |
| JetBlue Airways Corp |
| Whitbread plc |
JetBlue Airways and Whitbread Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JetBlue Airways and Whitbread Plc
The main advantage of trading using opposite JetBlue Airways and Whitbread Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, Whitbread Plc 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 Whitbread Plc will offset losses from the drop in Whitbread Plc's long position.| JetBlue Airways vs. American Airlines Group | JetBlue Airways vs. Southwest Airlines | JetBlue Airways vs. United Airlines Holdings | JetBlue Airways vs. Frontier Group Holdings |
| Whitbread Plc vs. Willamette Valley Vineyards | Whitbread Plc vs. AMCON Distributing | Whitbread Plc vs. Nascent Wine | Whitbread Plc vs. Diageo PLC ADR |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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