Correlation Between Sealed Air and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both Sealed Air 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 Sealed Air and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and JetBlue Airways Corp, you can compare the effects of market volatilities on Sealed Air 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 Sealed Air with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and JetBlue Airways.
Diversification Opportunities for Sealed Air and JetBlue Airways
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sealed and JetBlue is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air 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 Sealed Air 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 Sealed Air 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 Sealed Air i.e., Sealed Air and JetBlue Airways go up and down completely randomly.
Pair Corralation between Sealed Air and JetBlue Airways
Considering the 90-day investment horizon Sealed Air is expected to generate 0.2 times more return on investment than JetBlue Airways. However, Sealed Air is 4.9 times less risky than JetBlue Airways. It trades about 0.13 of its potential returns per unit of risk. JetBlue Airways Corp is currently generating about -0.07 per unit of risk. If you would invest 3,372 in Sealed Air on November 4, 2024 and sell it today you would earn a total of 111.00 from holding Sealed Air or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sealed Air vs. JetBlue Airways Corp
Performance |
| Timeline |
| Sealed Air |
| JetBlue Airways Corp |
Sealed Air and JetBlue Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and JetBlue Airways
The main advantage of trading using opposite Sealed Air and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air 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.| Sealed Air vs. Avery Dennison Corp | Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Packaging Corp of |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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