Correlation Between Union Pacific and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both Union Pacific 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 Union Pacific and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Union Pacific and JetBlue Airways Corp, you can compare the effects of market volatilities on Union Pacific 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 Union Pacific with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Pacific and JetBlue Airways.
Diversification Opportunities for Union Pacific and JetBlue Airways
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Union and JetBlue is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Union Pacific 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 Union Pacific 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 Union Pacific 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 Union Pacific i.e., Union Pacific and JetBlue Airways go up and down completely randomly.
Pair Corralation between Union Pacific and JetBlue Airways
Considering the 90-day investment horizon Union Pacific is expected to generate 0.44 times more return on investment than JetBlue Airways. However, Union Pacific is 2.27 times less risky than JetBlue Airways. It trades about 0.14 of its potential returns per unit of risk. JetBlue Airways Corp is currently generating about 0.0 per unit of risk. If you would invest 23,199 in Union Pacific on August 30, 2024 and sell it today you would earn a total of 1,324 from holding Union Pacific or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Pacific vs. JetBlue Airways Corp
Performance |
| Timeline |
| Union Pacific |
| JetBlue Airways Corp |
Union Pacific and JetBlue Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Pacific and JetBlue Airways
The main advantage of trading using opposite Union Pacific and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Pacific 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.| Union Pacific vs. Norfolk Southern | Union Pacific vs. CSX Corporation | Union Pacific vs. United Parcel Service | Union Pacific vs. Canadian National Railway |
| JetBlue Airways vs. American Airlines Group | JetBlue Airways vs. Southwest Airlines | JetBlue Airways vs. Frontier Group Holdings |
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.
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