Correlation Between Montauk Renewables and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both Montauk Renewables 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 Montauk Renewables and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Montauk Renewables and JetBlue Airways Corp, you can compare the effects of market volatilities on Montauk Renewables 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 Montauk Renewables with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Montauk Renewables and JetBlue Airways.
Diversification Opportunities for Montauk Renewables and JetBlue Airways
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Montauk and JetBlue is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Montauk Renewables 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 Montauk Renewables 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 Montauk Renewables 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 Montauk Renewables i.e., Montauk Renewables and JetBlue Airways go up and down completely randomly.
Pair Corralation between Montauk Renewables and JetBlue Airways
Given the investment horizon of 90 days Montauk Renewables is expected to under-perform the JetBlue Airways. In addition to that, Montauk Renewables is 1.12 times more volatile than JetBlue Airways Corp. It trades about -0.02 of its total potential returns per unit of risk. JetBlue Airways Corp is currently generating about 0.0 per unit of volatility. If you would invest 849.00 in JetBlue Airways Corp on September 1, 2024 and sell it today you would lose (252.00) from holding JetBlue Airways Corp or give up 29.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Montauk Renewables vs. JetBlue Airways Corp
Performance |
| Timeline |
| Montauk Renewables |
| JetBlue Airways Corp |
Montauk Renewables and JetBlue Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Montauk Renewables and JetBlue Airways
The main advantage of trading using opposite Montauk Renewables and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Montauk Renewables 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.| Montauk Renewables vs. Avista | Montauk Renewables vs. Allete Inc | Montauk Renewables vs. Black Hills | Montauk Renewables vs. Companhia Paranaense de |
| JetBlue Airways vs. Canadian Pacific Railway | JetBlue Airways vs. Volaris | JetBlue Airways vs. Werner Enterprises | JetBlue Airways vs. Canadian National Railway |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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