Correlation Between Aperture Health and JetBlue Airways

Can any of the company-specific risk be diversified away by investing in both Aperture Health 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 Aperture Health and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aperture Health and JetBlue Airways Corp, you can compare the effects of market volatilities on Aperture Health 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 Aperture Health with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aperture Health and JetBlue Airways.

Diversification Opportunities for Aperture Health and JetBlue Airways

0.0

Correlation Coefficient

Aperture Health  JetBlue Airways

Pay attention - limited upside

The 3 months correlation between Aperture and JetBlue is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aperture Health 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 Aperture Health 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 Aperture Health 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 Aperture Health i.e., Aperture Health and JetBlue Airways go up and down completely randomly.

Pair Corralation between Aperture Health and JetBlue Airways

Given the investment horizon of 90 days Aperture Health is expected to generate 3.91 times more return on investment than JetBlue Airways. However, Aperture Health is 3.91 times more volatile than JetBlue Airways Corp. It trades about 0.04 of its potential returns per unit of risk. JetBlue Airways Corp is currently generating about 0.02 per unit of risk. If you would invest  12.00  in Aperture Health on October 26, 2024 and sell it today you would lose (6.10) from holding Aperture Health or give up 50.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.4%
Values	Daily Returns

Aperture Health  vs.  JetBlue Airways Corp

Aperture Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aperture Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Aperture Health is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

JetBlue Airways Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JetBlue Airways Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady essential indicators, JetBlue Airways unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aperture Health and JetBlue Airways

The main advantage of trading using opposite Aperture Health and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aperture Health 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.

The idea behind Aperture Health and JetBlue Airways Corp 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.