Correlation Between JetBlue Airways and Micron Technology

Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and Micron Technology 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 Micron Technology 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 Micron Technology, you can compare the effects of market volatilities on JetBlue Airways and Micron Technology 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 Micron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and Micron Technology.

Diversification Opportunities for JetBlue Airways and Micron Technology

0.15

Correlation Coefficient

JetBlue Airways  Micron Technology

Average diversification

The 3 months correlation between JetBlue and Micron is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology 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 Micron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micron Technology has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Micron Technology go up and down completely randomly.

Pair Corralation between JetBlue Airways and Micron Technology

Given the investment horizon of 90 days JetBlue Airways Corp is expected to under-perform the Micron Technology. In addition to that, JetBlue Airways is 1.24 times more volatile than Micron Technology. It trades about -0.09 of its total potential returns per unit of risk. Micron Technology is currently generating about 0.04 per unit of volatility. If you would invest  8,955  in Micron Technology on December 23, 2024 and sell it today you would earn a total of  442.00  from holding Micron Technology or generate 4.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

JetBlue Airways Corp  vs.  Micron Technology

JetBlue Airways Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days JetBlue Airways Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Micron Technology

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Micron Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Micron Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with JetBlue Airways and Micron Technology

The main advantage of trading using opposite JetBlue Airways and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, Micron Technology 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 Micron Technology will offset losses from the drop in Micron Technology's long position.

The idea behind JetBlue Airways Corp and Micron Technology 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.