Correlation Between JetBlue Airways and Delta Air
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and Delta Air 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 Delta Air 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 Delta Air Lines, you can compare the effects of market volatilities on JetBlue Airways and Delta Air 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 Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and Delta Air.
Diversification Opportunities for JetBlue Airways and Delta Air
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JetBlue and Delta is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines 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 Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Delta Air go up and down completely randomly.
Pair Corralation between JetBlue Airways and Delta Air
Given the investment horizon of 90 days JetBlue Airways Corp is expected to generate 2.25 times more return on investment than Delta Air. However, JetBlue Airways is 2.25 times more volatile than Delta Air Lines. It trades about 0.05 of its potential returns per unit of risk. Delta Air Lines is currently generating about 0.04 per unit of risk. If you would invest 639.00 in JetBlue Airways Corp on November 18, 2024 and sell it today you would earn a total of 39.00 from holding JetBlue Airways Corp or generate 6.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JetBlue Airways Corp vs. Delta Air Lines
Performance |
| Timeline |
| JetBlue Airways Corp |
| Delta Air Lines |
JetBlue Airways and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JetBlue Airways and Delta Air
The main advantage of trading using opposite JetBlue Airways and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, Delta Air 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 Delta Air will offset losses from the drop in Delta Air'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 |
| Delta Air vs. American Airlines Group | Delta Air vs. Southwest Airlines | Delta Air vs. JetBlue Airways Corp | Delta Air vs. United Airlines Holdings |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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