Correlation Between JetBlue Airways and Pond Technologies

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

Diversification Opportunities for JetBlue Airways and Pond Technologies

0.04

Correlation Coefficient

JetBlue Airways  Pond Technologies

Significant diversification

The 3 months correlation between JetBlue and Pond is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Pond Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pond Technologies 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 Pond Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pond Technologies has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Pond Technologies go up and down completely randomly.

Pair Corralation between JetBlue Airways and Pond Technologies

If you would invest  682.00  in JetBlue Airways Corp on October 8, 2024 and sell it today you would earn a total of  87.00  from holding JetBlue Airways Corp or generate 12.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

JetBlue Airways Corp  vs.  Pond Technologies Holdings

JetBlue Airways Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JetBlue Airways Corp are ranked lower than 4 (%) 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.

Pond Technologies

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pond Technologies Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Pond Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JetBlue Airways and Pond Technologies

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

The idea behind JetBlue Airways Corp and Pond Technologies Holdings 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.