Correlation Between JetBlue Airways and Hartford Financial

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

Diversification Opportunities for JetBlue Airways and Hartford Financial

0.47

Correlation Coefficient

JetBlue Airways  Hartford Financial

Very weak diversification

The 3 months correlation between JetBlue and Hartford is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and The Hartford Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Financial 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 Hartford Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hartford Financial has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Hartford Financial go up and down completely randomly.

Pair Corralation between JetBlue Airways and Hartford Financial

Given the investment horizon of 90 days JetBlue Airways Corp is expected to generate 84.5 times more return on investment than Hartford Financial. However, JetBlue Airways is 84.5 times more volatile than The Hartford Financial. It trades about 0.04 of its potential returns per unit of risk. The Hartford Financial is currently generating about 0.13 per unit of risk. If you would invest  707.00  in JetBlue Airways Corp on October 8, 2024 and sell it today you would earn a total of  44.00  from holding JetBlue Airways Corp or generate 6.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.65%
Values	Daily Returns

JetBlue Airways Corp  vs.  The Hartford Financial

JetBlue Airways Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JetBlue Airways Corp are ranked lower than 3 (%) 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.

The Hartford Financial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Financial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Hartford Financial 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 Hartford Financial

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

The idea behind JetBlue Airways Corp and The Hartford Financial 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.