Correlation Between Hawaiian Holdings and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both Hawaiian Holdings 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 Hawaiian Holdings and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Holdings and JetBlue Airways Corp, you can compare the effects of market volatilities on Hawaiian Holdings 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 Hawaiian Holdings with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Holdings and JetBlue Airways.
Diversification Opportunities for Hawaiian Holdings and JetBlue Airways
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hawaiian and JetBlue is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Holdings 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 Hawaiian Holdings 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 Hawaiian 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 Corp has no effect on the direction of Hawaiian Holdings i.e., Hawaiian Holdings and JetBlue Airways go up and down completely randomly.
Pair Corralation between Hawaiian Holdings and JetBlue Airways
Allowing for the 90-day total investment horizon Hawaiian Holdings is expected to under-perform the JetBlue Airways. But the stock apears to be less risky and, when comparing its historical volatility, Hawaiian Holdings is 2.14 times less risky than JetBlue Airways. The stock trades about -0.24 of its potential returns per unit of risk. The JetBlue Airways Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 717.00 in JetBlue Airways Corp on January 20, 2024 and sell it today you would lose (6.00) from holding JetBlue Airways Corp or give up 0.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hawaiian Holdings vs. JetBlue Airways Corp
Performance |
| Timeline |
| Hawaiian Holdings |
| JetBlue Airways Corp |
Hawaiian Holdings and JetBlue Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Holdings and JetBlue Airways
The main advantage of trading using opposite Hawaiian Holdings and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Holdings 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.| Hawaiian Holdings vs. Southwest Airlines | Hawaiian Holdings vs. JetBlue Airways Corp | Hawaiian Holdings vs. United Airlines Holdings | Hawaiian Holdings vs. Delta Air Lines |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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