Correlation Between Sabre Insurance and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance 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 Sabre Insurance and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sabre Insurance Group and JetBlue Airways Corp, you can compare the effects of market volatilities on Sabre Insurance 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 Sabre Insurance with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and JetBlue Airways.
Diversification Opportunities for Sabre Insurance and JetBlue Airways
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sabre and JetBlue is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group 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 Sabre Insurance 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 Sabre Insurance Group 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 Sabre Insurance i.e., Sabre Insurance and JetBlue Airways go up and down completely randomly.
Pair Corralation between Sabre Insurance and JetBlue Airways
Assuming the 90 days horizon Sabre Insurance is expected to generate 5.9 times less return on investment than JetBlue Airways. But when comparing it to its historical volatility, Sabre Insurance Group is 14.4 times less risky than JetBlue Airways. It trades about 0.09 of its potential returns per unit of risk. JetBlue Airways Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 531.00 in JetBlue Airways Corp on August 28, 2024 and sell it today you would earn a total of 81.00 from holding JetBlue Airways Corp or generate 15.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.52% |
| Values | Daily Returns |
Sabre Insurance Group vs. JetBlue Airways Corp
Performance |
| Timeline |
| Sabre Insurance Group |
| JetBlue Airways Corp |
Sabre Insurance and JetBlue Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and JetBlue Airways
The main advantage of trading using opposite Sabre Insurance and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance 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.| Sabre Insurance vs. National Beverage Corp | Sabre Insurance vs. Mid Atlantic Home Health | Sabre Insurance vs. SNDL Inc | Sabre Insurance vs. Oatly Group AB |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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