Correlation Between JetBlue Airways and Killbuck Bancshares

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

Diversification Opportunities for JetBlue Airways and Killbuck Bancshares

0.25

Correlation Coefficient

JetBlue Airways  Killbuck Bancshares

Modest diversification

The 3 months correlation between JetBlue and Killbuck is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Killbuck Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Killbuck Bancshares 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 Killbuck Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Killbuck Bancshares has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Killbuck Bancshares go up and down completely randomly.

Pair Corralation between JetBlue Airways and Killbuck Bancshares

Given the investment horizon of 90 days JetBlue Airways Corp is expected to generate 2.25 times more return on investment than Killbuck Bancshares. However, JetBlue Airways is 2.25 times more volatile than Killbuck Bancshares. It trades about 0.06 of its potential returns per unit of risk. Killbuck Bancshares is currently generating about 0.03 per unit of risk. If you would invest  556.00  in JetBlue Airways Corp on September 14, 2024 and sell it today you would earn a total of  148.00  from holding JetBlue Airways Corp or generate 26.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.21%
Values	Daily Returns

JetBlue Airways Corp  vs.  Killbuck Bancshares

JetBlue Airways Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JetBlue Airways Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady essential indicators, JetBlue Airways unveiled solid returns over the last few months and may actually be approaching a breakup point.

Killbuck Bancshares

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Killbuck Bancshares are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Killbuck Bancshares may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with JetBlue Airways and Killbuck Bancshares

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

The idea behind JetBlue Airways Corp and Killbuck Bancshares 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.