Correlation Between JetBlue Airways and Coca Cola
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and Coca Cola 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 Coca Cola 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 The Coca Cola, you can compare the effects of market volatilities on JetBlue Airways and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and Coca Cola.
Diversification Opportunities for JetBlue Airways and Coca Cola
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JetBlue and Coca is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Coca Cola go up and down completely randomly.
Pair Corralation between JetBlue Airways and Coca Cola
Given the investment horizon of 90 days JetBlue Airways is expected to generate 5.35 times less return on investment than Coca Cola. In addition to that, JetBlue Airways is 6.47 times more volatile than The Coca Cola. It trades about 0.0 of its total potential returns per unit of risk. The Coca Cola is currently generating about 0.15 per unit of volatility. If you would invest 5,923 in The Coca Cola on February 12, 2024 and sell it today you would earn a total of 403.00 from holding The Coca Cola or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JetBlue Airways Corp vs. The Coca Cola
Performance |
| Timeline |
| JetBlue Airways Corp |
| Coca Cola |
JetBlue Airways and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JetBlue Airways and Coca Cola
The main advantage of trading using opposite JetBlue Airways and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's 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 |
| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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