Correlation Between JetBlue Airways and Hawaiian Holdings
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and Hawaiian Holdings 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 JetBlue Airways and Hawaiian Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JetBlue Airways Corp and Hawaiian Holdings, you can compare the effects of market volatilities on JetBlue Airways and Hawaiian Holdings 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 JetBlue Airways with a short position of Hawaiian Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and Hawaiian Holdings.
Diversification Opportunities for JetBlue Airways and Hawaiian Holdings
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JetBlue and Hawaiian is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Hawaiian Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Holdings and JetBlue Airways 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 JetBlue Airways Corp are associated (or correlated) with Hawaiian Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawaiian Holdings has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Hawaiian Holdings go up and down completely randomly.
Pair Corralation between JetBlue Airways and Hawaiian Holdings
Given the investment horizon of 90 days JetBlue Airways Corp is expected to under-perform the Hawaiian Holdings. But the stock apears to be less risky and, when comparing its historical volatility, JetBlue Airways Corp is 2.67 times less risky than Hawaiian Holdings. The stock trades about -0.02 of its potential returns per unit of risk. The Hawaiian Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,707 in Hawaiian Holdings on January 25, 2024 and sell it today you would lose (417.00) from holding Hawaiian Holdings or give up 24.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JetBlue Airways Corp vs. Hawaiian Holdings
Performance |
| Timeline |
| JetBlue Airways Corp |
| Hawaiian Holdings |
JetBlue Airways and Hawaiian Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JetBlue Airways and Hawaiian Holdings
The main advantage of trading using opposite JetBlue Airways and Hawaiian Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, Hawaiian Holdings 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 Hawaiian Holdings will offset losses from the drop in Hawaiian Holdings' long position.| JetBlue Airways vs. Frontier Group Holdings | JetBlue Airways vs. Southwest Airlines | JetBlue Airways vs. United Airlines Holdings | JetBlue Airways vs. American Airlines Group |
| Hawaiian Holdings vs. Southwest Airlines | Hawaiian Holdings vs. JetBlue Airways Corp | Hawaiian Holdings vs. United Airlines Holdings | Hawaiian Holdings vs. Delta Air Lines |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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