Correlation Between KNOT Offshore and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both KNOT Offshore and JetBlue Airways 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 KNOT Offshore and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KNOT Offshore Partners and JetBlue Airways Corp, you can compare the effects of market volatilities on KNOT Offshore and JetBlue Airways 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 KNOT Offshore with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOT Offshore and JetBlue Airways.
Diversification Opportunities for KNOT Offshore and JetBlue Airways
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KNOT and JetBlue is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners and JetBlue Airways Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JetBlue Airways Corp and KNOT Offshore 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 KNOT Offshore Partners are associated (or correlated) with JetBlue Airways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JetBlue Airways Corp has no effect on the direction of KNOT Offshore i.e., KNOT Offshore and JetBlue Airways go up and down completely randomly.
Pair Corralation between KNOT Offshore and JetBlue Airways
Given the investment horizon of 90 days KNOT Offshore Partners is expected to generate 0.32 times more return on investment than JetBlue Airways. However, KNOT Offshore Partners is 3.1 times less risky than JetBlue Airways. It trades about -0.08 of its potential returns per unit of risk. JetBlue Airways Corp is currently generating about -0.15 per unit of risk. If you would invest 615.00 in KNOT Offshore Partners on August 29, 2024 and sell it today you would lose (20.00) from holding KNOT Offshore Partners or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KNOT Offshore Partners vs. JetBlue Airways Corp
Performance |
| Timeline |
| KNOT Offshore Partners |
| JetBlue Airways Corp |
KNOT Offshore and JetBlue Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOT Offshore and JetBlue Airways
The main advantage of trading using opposite KNOT Offshore and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore position performs unexpectedly, JetBlue Airways 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 JetBlue Airways will offset losses from the drop in JetBlue Airways' long position.| KNOT Offshore vs. USA Compression Partners | KNOT Offshore vs. Dynagas LNG Partners | KNOT Offshore vs. Crossamerica Partners LP | KNOT Offshore vs. Delek Logistics Partners |
| JetBlue Airways vs. Frontier Group Holdings | JetBlue Airways vs. Southwest Airlines | JetBlue Airways vs. United Airlines Holdings | JetBlue Airways 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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