Correlation Between JetBlue Airways and Massmutual Retiresmart

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

Diversification Opportunities for JetBlue Airways and Massmutual Retiresmart

-0.47

Correlation Coefficient

JetBlue Airways  Massmutual Retiresmart

Very good diversification

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

Pair Corralation between JetBlue Airways and Massmutual Retiresmart

Given the investment horizon of 90 days JetBlue Airways Corp is expected to generate 3.12 times more return on investment than Massmutual Retiresmart. However, JetBlue Airways is 3.12 times more volatile than Massmutual Retiresmart Moderate. It trades about 0.16 of its potential returns per unit of risk. Massmutual Retiresmart Moderate is currently generating about -0.27 per unit of risk. If you would invest  682.00  in JetBlue Airways Corp on October 8, 2024 and sell it today you would earn a total of  69.00  from holding JetBlue Airways Corp or generate 10.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

JetBlue Airways Corp  vs.  Massmutual Retiresmart Moderat

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.

Massmutual Retiresmart

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Massmutual Retiresmart Moderate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Massmutual Retiresmart 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 Massmutual Retiresmart

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

The idea behind JetBlue Airways Corp and Massmutual Retiresmart Moderate 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.