Correlation Between Victorias Secret and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both Victorias Secret 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 Victorias Secret and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victorias Secret Co and JetBlue Airways Corp, you can compare the effects of market volatilities on Victorias Secret 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 Victorias Secret with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victorias Secret and JetBlue Airways.
Diversification Opportunities for Victorias Secret and JetBlue Airways
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Victorias and JetBlue is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Victorias Secret Co 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 Victorias Secret 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 Victorias Secret Co 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 Victorias Secret i.e., Victorias Secret and JetBlue Airways go up and down completely randomly.
Pair Corralation between Victorias Secret and JetBlue Airways
Given the investment horizon of 90 days Victorias Secret Co is expected to generate 0.69 times more return on investment than JetBlue Airways. However, Victorias Secret Co is 1.44 times less risky than JetBlue Airways. It trades about 0.34 of its potential returns per unit of risk. JetBlue Airways Corp is currently generating about 0.01 per unit of risk. If you would invest 2,856 in Victorias Secret Co on September 19, 2024 and sell it today you would earn a total of 1,653 from holding Victorias Secret Co or generate 57.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victorias Secret Co vs. JetBlue Airways Corp
Performance |
| Timeline |
| Victorias Secret |
| JetBlue Airways Corp |
Victorias Secret and JetBlue Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victorias Secret and JetBlue Airways
The main advantage of trading using opposite Victorias Secret and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victorias Secret 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.| Victorias Secret vs. Ross Stores | Victorias Secret vs. Childrens Place | Victorias Secret vs. Buckle Inc | Victorias Secret vs. Guess Inc |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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