Correlation Between JetBlue Airways and Royce Global

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

Diversification Opportunities for JetBlue Airways and Royce Global

0.27

Correlation Coefficient

JetBlue Airways  Royce Global

Modest diversification

The 3 months correlation between JetBlue and Royce is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Royce Global Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royce Global Value 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 Royce Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royce Global Value has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Royce Global go up and down completely randomly.

Pair Corralation between JetBlue Airways and Royce Global

Given the investment horizon of 90 days JetBlue Airways Corp is expected to under-perform the Royce Global. In addition to that, JetBlue Airways is 5.26 times more volatile than Royce Global Value. It trades about -0.06 of its total potential returns per unit of risk. Royce Global Value is currently generating about -0.02 per unit of volatility. If you would invest  1,080  in Royce Global Value on December 20, 2024 and sell it today you would lose (13.00) from holding Royce Global Value or give up 1.2% of portfolio value over 90 days.

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

JetBlue Airways Corp  vs.  Royce Global Value

JetBlue Airways Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days JetBlue Airways Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Royce Global Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Royce Global Value has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Royce Global is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with JetBlue Airways and Royce Global

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

The idea behind JetBlue Airways Corp and Royce Global Value 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..