Correlation Between JetBlue Airways and Good Natured

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

Diversification Opportunities for JetBlue Airways and Good Natured

0.38

Correlation Coefficient

JetBlue Airways  Good Natured

Weak diversification

The 3 months correlation between JetBlue and Good is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Good Natured Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Good Natured Products 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 Good Natured. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Good Natured Products has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Good Natured go up and down completely randomly.

Pair Corralation between JetBlue Airways and Good Natured

Given the investment horizon of 90 days JetBlue Airways Corp is expected to generate 1.92 times more return on investment than Good Natured. However, JetBlue Airways is 1.92 times more volatile than Good Natured Products. It trades about 0.14 of its potential returns per unit of risk. Good Natured Products is currently generating about 0.26 per unit of risk. If you would invest  616.00  in JetBlue Airways Corp on October 7, 2024 and sell it today you would earn a total of  135.00  from holding JetBlue Airways Corp or generate 21.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	36.59%
Values	Daily Returns

JetBlue Airways Corp  vs.  Good Natured Products

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.

Good Natured Products

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Good Natured Products has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, Good Natured reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JetBlue Airways and Good Natured

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

The idea behind JetBlue Airways Corp and Good Natured Products 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.