Correlation Between Hawaiian Holdings and JetBlue Airways

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

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

Diversification Opportunities for Hawaiian Holdings and JetBlue Airways

0.0

Correlation Coefficient

Hawaiian Holdings  JetBlue Airways

Pay attention - limited upside

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

Pair Corralation between Hawaiian Holdings and JetBlue Airways

If you would invest  596.00  in JetBlue Airways Corp on November 19, 2024 and sell it today you would earn a total of  82.00  from holding JetBlue Airways Corp or generate 13.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Hawaiian Holdings  vs.  JetBlue Airways Corp

Hawaiian Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hawaiian Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Hawaiian Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

JetBlue Airways Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JetBlue Airways Corp are ranked lower than 5 (%) 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 Hawaiian Holdings and JetBlue Airways

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

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.