Correlation Between United Airlines and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both United Airlines 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 United Airlines and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Airlines Holdings and JetBlue Airways, you can compare the effects of market volatilities on United Airlines 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 United Airlines with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and JetBlue Airways.
Diversification Opportunities for United Airlines and JetBlue Airways
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between United and JetBlue is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and JetBlue Airways in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JetBlue Airways and United Airlines 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 United Airlines Holdings 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 has no effect on the direction of United Airlines i.e., United Airlines and JetBlue Airways go up and down completely randomly.
Pair Corralation between United Airlines and JetBlue Airways
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 1.26 times more return on investment than JetBlue Airways. However, United Airlines is 1.26 times more volatile than JetBlue Airways. It trades about 0.37 of its potential returns per unit of risk. JetBlue Airways is currently generating about 0.29 per unit of risk. If you would invest 192,000 in United Airlines Holdings on October 23, 2024 and sell it today you would earn a total of 30,800 from holding United Airlines Holdings or generate 16.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. JetBlue Airways
Performance |
| Timeline |
| United Airlines Holdings |
| JetBlue Airways |
United Airlines and JetBlue Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and JetBlue Airways
The main advantage of trading using opposite United Airlines and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines 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.| United Airlines vs. Capital One Financial | United Airlines vs. Southern Copper | United Airlines vs. Verizon Communications | United Airlines vs. Cognizant Technology Solutions |
| JetBlue Airways vs. GMxico Transportes SAB | JetBlue Airways vs. DXC Technology | JetBlue Airways vs. Martin Marietta Materials | JetBlue Airways vs. UnitedHealth Group Incorporated |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |