Correlation Between JetBlue Airways and CCL Industries

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

Diversification Opportunities for JetBlue Airways and CCL Industries

-0.41

Correlation Coefficient

JetBlue Airways  CCL Industries

Very good diversification

The 3 months correlation between JetBlue and CCL is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and CCL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCL Industries 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 CCL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCL Industries has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and CCL Industries go up and down completely randomly.

Pair Corralation between JetBlue Airways and CCL Industries

Given the investment horizon of 90 days JetBlue Airways is expected to generate 1.19 times less return on investment than CCL Industries. In addition to that, JetBlue Airways is 2.61 times more volatile than CCL Industries. It trades about 0.01 of its total potential returns per unit of risk. CCL Industries is currently generating about 0.04 per unit of volatility. If you would invest  3,906  in CCL Industries on October 8, 2024 and sell it today you would earn a total of  1,074  from holding CCL Industries or generate 27.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.2%
Values	Daily Returns

JetBlue Airways Corp  vs.  CCL Industries

JetBlue Airways Corp

Risk-Adjusted Performance

3 of 100

Weak

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

CCL Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CCL Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CCL Industries is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with JetBlue Airways and CCL Industries

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

The idea behind JetBlue Airways Corp and CCL Industries 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.