Correlation Between JetBlue Airways and Amg Managers

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

Diversification Opportunities for JetBlue Airways and Amg Managers

-0.7

Correlation Coefficient

JetBlue Airways  Amg Managers

Excellent diversification

The 3 months correlation between JetBlue and Amg is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Amg Managers Fairpointe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Fairpointe 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 Amg Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Managers Fairpointe has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Amg Managers go up and down completely randomly.

Pair Corralation between JetBlue Airways and Amg Managers

Given the investment horizon of 90 days JetBlue Airways Corp is expected to under-perform the Amg Managers. In addition to that, JetBlue Airways is 3.59 times more volatile than Amg Managers Fairpointe. It trades about 0.0 of its total potential returns per unit of risk. Amg Managers Fairpointe is currently generating about 0.26 per unit of volatility. If you would invest  2,181  in Amg Managers Fairpointe on October 22, 2024 and sell it today you would earn a total of  64.00  from holding Amg Managers Fairpointe or generate 2.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

JetBlue Airways Corp  vs.  Amg Managers Fairpointe

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.

Amg Managers Fairpointe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amg Managers Fairpointe has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Amg Managers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JetBlue Airways and Amg Managers

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

The idea behind JetBlue Airways Corp and Amg Managers Fairpointe 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.