Correlation Between Boston Beer and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both Boston Beer 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 Boston Beer and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and JetBlue Airways Corp, you can compare the effects of market volatilities on Boston Beer 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 Boston Beer with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and JetBlue Airways.
Diversification Opportunities for Boston Beer and JetBlue Airways
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Boston and JetBlue is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer 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 Boston Beer 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 Boston Beer 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 Boston Beer i.e., Boston Beer and JetBlue Airways go up and down completely randomly.
Pair Corralation between Boston Beer and JetBlue Airways
Considering the 90-day investment horizon Boston Beer is expected to generate 1.2 times less return on investment than JetBlue Airways. But when comparing it to its historical volatility, Boston Beer is 2.97 times less risky than JetBlue Airways. It trades about 0.17 of its potential returns per unit of risk. JetBlue Airways Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 592.00 in JetBlue Airways Corp on September 12, 2024 and sell it today you would earn a total of 86.00 from holding JetBlue Airways Corp or generate 14.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Boston Beer vs. JetBlue Airways Corp
Performance |
Timeline |
Boston Beer |
JetBlue Airways Corp |
Boston Beer and JetBlue Airways Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Boston Beer and JetBlue Airways
The main advantage of trading using opposite Boston Beer and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer 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.Boston Beer vs. Anheuser Busch Inbev | Boston Beer vs. Molson Coors Beverage | Boston Beer vs. Heineken NV | Boston Beer vs. Ambev SA ADR |
JetBlue Airways vs. Volaris | JetBlue Airways vs. flyExclusive, | JetBlue Airways vs. Alaska Air Group | JetBlue Airways vs. Copa Holdings SA |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |