Correlation Between Universal Display and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both Universal Display 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 Universal Display and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and JetBlue Airways Corp, you can compare the effects of market volatilities on Universal Display 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 Universal Display with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and JetBlue Airways.
Diversification Opportunities for Universal Display and JetBlue Airways
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Universal and JetBlue is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display 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 Universal Display 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 Universal Display 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 Universal Display i.e., Universal Display and JetBlue Airways go up and down completely randomly.
Pair Corralation between Universal Display and JetBlue Airways
Given the investment horizon of 90 days Universal Display is expected to under-perform the JetBlue Airways. But the stock apears to be less risky and, when comparing its historical volatility, Universal Display is 2.71 times less risky than JetBlue Airways. The stock trades about -0.21 of its potential returns per unit of risk. The JetBlue Airways Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 637.00 in JetBlue Airways Corp on September 12, 2024 and sell it today you would earn a total of 116.00 from holding JetBlue Airways Corp or generate 18.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Display vs. JetBlue Airways Corp
Performance |
| Timeline |
| Universal Display |
| JetBlue Airways Corp |
Universal Display and JetBlue Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and JetBlue Airways
The main advantage of trading using opposite Universal Display and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display 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.| Universal Display vs. Plexus Corp | Universal Display vs. Methode Electronics | Universal Display vs. Benchmark Electronics | Universal Display vs. Bel Fuse A |
| JetBlue Airways vs. Volaris | JetBlue Airways vs. flyExclusive, | JetBlue Airways vs. Alaska Air Group | JetBlue Airways 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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