Correlation Between International Consolidated and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both International Consolidated 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 International Consolidated and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Consolidated Airlines and JetBlue Airways Corp, you can compare the effects of market volatilities on International Consolidated 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 International Consolidated with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Consolidated and JetBlue Airways.
Diversification Opportunities for International Consolidated and JetBlue Airways
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between International and JetBlue is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Air 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 International Consolidated 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 International Consolidated Airlines 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 International Consolidated i.e., International Consolidated and JetBlue Airways go up and down completely randomly.
Pair Corralation between International Consolidated and JetBlue Airways
Assuming the 90 days horizon International Consolidated Airlines is expected to under-perform the JetBlue Airways. But the pink sheet apears to be less risky and, when comparing its historical volatility, International Consolidated Airlines is 1.49 times less risky than JetBlue Airways. The pink sheet trades about -0.01 of its potential returns per unit of risk. The JetBlue Airways Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 671.00 in JetBlue Airways Corp on January 19, 2024 and sell it today you would earn a total of 61.00 from holding JetBlue Airways Corp or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Consolidated Air vs. JetBlue Airways Corp
Performance |
| Timeline |
| International Consolidated |
| JetBlue Airways Corp |
International Consolidated and JetBlue Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Consolidated and JetBlue Airways
The main advantage of trading using opposite International Consolidated and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Consolidated 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.| International Consolidated vs. V2X Inc | International Consolidated vs. National Presto Industries | International Consolidated vs. Kaman | International Consolidated vs. Woodward |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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