Correlation Between JetBlue Airways and Fomento Econmico

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Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and Fomento Econmico 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 Fomento Econmico into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JetBlue Airways and Fomento Econmico Mexicano, you can compare the effects of market volatilities on JetBlue Airways and Fomento Econmico 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 Fomento Econmico. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and Fomento Econmico.

Diversification Opportunities for JetBlue Airways and Fomento Econmico

-0.42
  Correlation Coefficient

Very good diversification

The 3 months correlation between JetBlue and Fomento is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways and Fomento Econmico Mexicano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fomento Econmico Mexicano 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 are associated (or correlated) with Fomento Econmico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fomento Econmico Mexicano has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Fomento Econmico go up and down completely randomly.

Pair Corralation between JetBlue Airways and Fomento Econmico

If you would invest (100.00) in JetBlue Airways on August 30, 2024 and sell it today you would earn a total of  100.00  from holding JetBlue Airways or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy0.0%
ValuesDaily Returns

JetBlue Airways  vs.  Fomento Econmico Mexicano

 Performance 
       Timeline  
JetBlue Airways 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Modest
Over the last 90 days JetBlue Airways has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, JetBlue Airways showed solid returns over the last few months and may actually be approaching a breakup point.
Fomento Econmico Mexicano 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Fomento Econmico Mexicano has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

JetBlue Airways and Fomento Econmico Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JetBlue Airways and Fomento Econmico

The main advantage of trading using opposite JetBlue Airways and Fomento Econmico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, Fomento Econmico 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 Fomento Econmico will offset losses from the drop in Fomento Econmico's long position.
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The idea behind JetBlue Airways and Fomento Econmico Mexicano pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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