Correlation Between JetBlue Airways and Utilities Ultrasector

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

Diversification Opportunities for JetBlue Airways and Utilities Ultrasector

-0.19

Correlation Coefficient

JetBlue Airways  Utilities Ultrasector

Good diversification

The 3 months correlation between JetBlue and Utilities is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Utilities Ultrasector Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utilities Ultrasector 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 Utilities Ultrasector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utilities Ultrasector has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Utilities Ultrasector go up and down completely randomly.

Pair Corralation between JetBlue Airways and Utilities Ultrasector

Given the investment horizon of 90 days JetBlue Airways Corp is expected to under-perform the Utilities Ultrasector. In addition to that, JetBlue Airways is 3.13 times more volatile than Utilities Ultrasector Profund. It trades about -0.09 of its total potential returns per unit of risk. Utilities Ultrasector Profund is currently generating about 0.04 per unit of volatility. If you would invest  6,472  in Utilities Ultrasector Profund on December 23, 2024 and sell it today you would earn a total of  235.00  from holding Utilities Ultrasector Profund or generate 3.63% return on investment over 90 days.

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

JetBlue Airways Corp  vs.  Utilities Ultrasector Profund

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.

Utilities Ultrasector

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Utilities Ultrasector Profund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Utilities Ultrasector 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 Utilities Ultrasector

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

The idea behind JetBlue Airways Corp and Utilities Ultrasector Profund 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.