Correlation Between JetBlue Airways and Wyndham

Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and Wyndham 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 Wyndham 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 Wyndham Destinations 45, you can compare the effects of market volatilities on JetBlue Airways and Wyndham 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 Wyndham. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and Wyndham.

Diversification Opportunities for JetBlue Airways and Wyndham

0.21

Correlation Coefficient

JetBlue Airways  Wyndham

Modest diversification

The 3 months correlation between JetBlue and Wyndham is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Wyndham Destinations 45 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wyndham Destinations 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 Wyndham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wyndham Destinations has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Wyndham go up and down completely randomly.

Pair Corralation between JetBlue Airways and Wyndham

Given the investment horizon of 90 days JetBlue Airways Corp is expected to under-perform the Wyndham. In addition to that, JetBlue Airways is 7.54 times more volatile than Wyndham Destinations 45. It trades about -0.08 of its total potential returns per unit of risk. Wyndham Destinations 45 is currently generating about -0.08 per unit of volatility. If you would invest  10,041  in Wyndham Destinations 45 on December 25, 2024 and sell it today you would lose (346.00) from holding Wyndham Destinations 45 or give up 3.45% of portfolio value over 90 days.

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

JetBlue Airways Corp  vs.  Wyndham Destinations 45

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.

Wyndham Destinations

Risk-Adjusted Performance

Weak

Over the last 90 days Wyndham Destinations 45 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Wyndham is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JetBlue Airways and Wyndham

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

The idea behind JetBlue Airways Corp and Wyndham Destinations 45 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.