Correlation Between JetBlue Airways and BINHO

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

Diversification Opportunities for JetBlue Airways and BINHO

0.75

Correlation Coefficient

JetBlue Airways  BINHO

Poor diversification

The 3 months correlation between JetBlue and BINHO is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and BINHO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BINHO 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 BINHO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BINHO has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and BINHO go up and down completely randomly.

Pair Corralation between JetBlue Airways and BINHO

Given the investment horizon of 90 days JetBlue Airways Corp is expected to generate 1.83 times more return on investment than BINHO. However, JetBlue Airways is 1.83 times more volatile than BINHO. It trades about -0.09 of its potential returns per unit of risk. BINHO is currently generating about -0.22 per unit of risk. If you would invest  768.00  in JetBlue Airways Corp on December 23, 2024 and sell it today you would lose (225.00) from holding JetBlue Airways Corp or give up 29.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.85%
Values	Daily Returns

JetBlue Airways Corp  vs.  BINHO

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.

BINHO

Risk-Adjusted Performance

Very Weak

Over the last 90 days BINHO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with JetBlue Airways and BINHO

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

The idea behind JetBlue Airways Corp and BINHO 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.