Correlation Between Virgin Australia and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both Virgin Australia 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 Virgin Australia and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virgin Australia Holdings and JetBlue Airways Corp, you can compare the effects of market volatilities on Virgin Australia 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 Virgin Australia with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virgin Australia and JetBlue Airways.
Diversification Opportunities for Virgin Australia and JetBlue Airways
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Virgin and JetBlue is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Virgin Australia 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 Virgin Australia 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 Virgin Australia 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 Virgin Australia i.e., Virgin Australia and JetBlue Airways go up and down completely randomly.
Pair Corralation between Virgin Australia and JetBlue Airways
If you would invest (100.00) in Virgin Australia Holdings on January 25, 2024 and sell it today you would earn a total of 100.00 from holding Virgin Australia Holdings or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Virgin Australia Holdings vs. JetBlue Airways Corp
Performance |
Timeline |
Virgin Australia Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
JetBlue Airways Corp |
Virgin Australia and JetBlue Airways Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Virgin Australia and JetBlue Airways
The main advantage of trading using opposite Virgin Australia and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virgin Australia 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.Virgin Australia vs. AerSale Corp | Virgin Australia vs. Blue Hat Interactive | Virgin Australia vs. NeogamesSA | Virgin Australia vs. NetEase |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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