Correlation Between NYSE Composite and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and JetBlue Airways Corp, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and JetBlue Airways.
Diversification Opportunities for NYSE Composite and JetBlue Airways
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and JetBlue is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and JetBlue Airways go up and down completely randomly.
Pair Corralation between NYSE Composite and JetBlue Airways
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.15 times more return on investment than JetBlue Airways. However, NYSE Composite is 6.5 times less risky than JetBlue Airways. It trades about 0.26 of its potential returns per unit of risk. JetBlue Airways Corp is currently generating about 0.0 per unit of risk. If you would invest 1,945,669 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 75,313 from holding NYSE Composite or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. JetBlue Airways Corp
Performance |
| Timeline |
NYSE Composite and JetBlue Airways Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
JetBlue Airways Corp
Pair trading matchups for JetBlue Airways
Pair Trading with NYSE Composite and JetBlue Airways
The main advantage of trading using opposite NYSE Composite and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Delek Drilling | NYSE Composite vs. Helmerich and Payne | NYSE Composite vs. Waste Management | NYSE Composite vs. US Global Investors |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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