Correlation Between Surf Air and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both Surf 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 Surf 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 Surf Air Mobility and JetBlue Airways Corp, you can compare the effects of market volatilities on Surf 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 Surf Air with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surf Air and JetBlue Airways.
Diversification Opportunities for Surf Air and JetBlue Airways
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Surf and JetBlue is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Surf Air Mobility 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 Surf 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 Surf Air Mobility 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 Surf Air i.e., Surf Air and JetBlue Airways go up and down completely randomly.
Pair Corralation between Surf Air and JetBlue Airways
Given the investment horizon of 90 days Surf Air Mobility is expected to generate 2.6 times more return on investment than JetBlue Airways. However, Surf Air is 2.6 times more volatile than JetBlue Airways Corp. It trades about 0.09 of its potential returns per unit of risk. JetBlue Airways Corp is currently generating about 0.03 per unit of risk. If you would invest 242.00 in Surf Air Mobility on September 1, 2024 and sell it today you would earn a total of 159.00 from holding Surf Air Mobility or generate 65.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Surf Air Mobility vs. JetBlue Airways Corp
Performance |
| Timeline |
| Surf Air Mobility |
| JetBlue Airways Corp |
Surf Air and JetBlue Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surf Air and JetBlue Airways
The main advantage of trading using opposite Surf Air and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surf 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.| Surf Air vs. Canadian Pacific Railway | Surf Air vs. Werner Enterprises | Surf Air vs. Canadian National Railway | Surf Air vs. CSX Corporation |
| JetBlue Airways vs. Canadian Pacific Railway | JetBlue Airways vs. Werner Enterprises | JetBlue Airways vs. Canadian National Railway | JetBlue Airways vs. CSX Corporation |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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