Correlation Between JetBlue Airways and Dreyfus Floating

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

Diversification Opportunities for JetBlue Airways and Dreyfus Floating

0.56

Correlation Coefficient

JetBlue Airways  Dreyfus Floating

Very weak diversification

The 3 months correlation between JetBlue and Dreyfus is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Dreyfus Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Floating Rate 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 Dreyfus Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Floating Rate has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Dreyfus Floating go up and down completely randomly.

Pair Corralation between JetBlue Airways and Dreyfus Floating

Given the investment horizon of 90 days JetBlue Airways Corp is expected to generate 42.71 times more return on investment than Dreyfus Floating. However, JetBlue Airways is 42.71 times more volatile than Dreyfus Floating Rate. It trades about 0.02 of its potential returns per unit of risk. Dreyfus Floating Rate is currently generating about 0.44 per unit of risk. If you would invest  800.00  in JetBlue Airways Corp on October 22, 2024 and sell it today you would lose (36.00) from holding JetBlue Airways Corp or give up 4.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

JetBlue Airways Corp  vs.  Dreyfus Floating Rate

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.

Dreyfus Floating Rate

Risk-Adjusted Performance

36 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Dreyfus Floating Rate are ranked lower than 36 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Dreyfus Floating 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 Dreyfus Floating

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

The idea behind JetBlue Airways Corp and Dreyfus Floating Rate 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.