Correlation Between JetBlue Airways and Strategic Metals

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

Diversification Opportunities for JetBlue Airways and Strategic Metals

-0.47

Correlation Coefficient

JetBlue Airways  Strategic Metals

Very good diversification

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

Pair Corralation between JetBlue Airways and Strategic Metals

Given the investment horizon of 90 days JetBlue Airways Corp is expected to under-perform the Strategic Metals. But the stock apears to be less risky and, when comparing its historical volatility, JetBlue Airways Corp is 1.11 times less risky than Strategic Metals. The stock trades about -0.07 of its potential returns per unit of risk. The Strategic Metals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  16.00  in Strategic Metals on December 11, 2024 and sell it today you would earn a total of  1.00  from holding Strategic Metals or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

JetBlue Airways Corp  vs.  Strategic Metals

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.

Strategic Metals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Strategic Metals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Strategic Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JetBlue Airways and Strategic Metals

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

The idea behind JetBlue Airways Corp and Strategic Metals 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.