Correlation Between JetBlue Airways and NH SPAC

Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and NH SPAC 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 NH SPAC 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 NH SPAC 8, you can compare the effects of market volatilities on JetBlue Airways and NH SPAC 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 NH SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and NH SPAC.

Diversification Opportunities for JetBlue Airways and NH SPAC

0.09

Correlation Coefficient

JetBlue Airways  NH SPAC

Significant diversification

The 3 months correlation between JetBlue and 218410 is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and NH SPAC 8 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH SPAC 8 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 NH SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH SPAC 8 has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and NH SPAC go up and down completely randomly.

Pair Corralation between JetBlue Airways and NH SPAC

Given the investment horizon of 90 days JetBlue Airways is expected to generate 1.27 times less return on investment than NH SPAC. In addition to that, JetBlue Airways is 1.09 times more volatile than NH SPAC 8. It trades about 0.04 of its total potential returns per unit of risk. NH SPAC 8 is currently generating about 0.05 per unit of volatility. If you would invest  1,207,985  in NH SPAC 8 on October 7, 2024 and sell it today you would earn a total of  93,015  from holding NH SPAC 8 or generate 7.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

JetBlue Airways Corp  vs.  NH SPAC 8

JetBlue Airways Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JetBlue Airways Corp are ranked lower than 2 (%) 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.

NH SPAC 8

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NH SPAC 8 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, NH SPAC sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JetBlue Airways and NH SPAC

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

The idea behind JetBlue Airways Corp and NH SPAC 8 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.