Correlation Between JetBlue Airways and Universal Security

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

Diversification Opportunities for JetBlue Airways and Universal Security

0.76

Correlation Coefficient

JetBlue Airways  Universal Security

Poor diversification

The 3 months correlation between JetBlue and Universal is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Universal Security Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Security 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 Universal Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Security has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Universal Security go up and down completely randomly.

Pair Corralation between JetBlue Airways and Universal Security

Given the investment horizon of 90 days JetBlue Airways Corp is expected to under-perform the Universal Security. In addition to that, JetBlue Airways is 2.11 times more volatile than Universal Security Instruments. It trades about -0.09 of its total potential returns per unit of risk. Universal Security Instruments is currently generating about -0.09 per unit of volatility. If you would invest  223.00  in Universal Security Instruments on December 22, 2024 and sell it today you would lose (29.00) from holding Universal Security Instruments or give up 13.0% of portfolio value over 90 days.

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

JetBlue Airways Corp  vs.  Universal Security Instruments

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.

Universal Security

Risk-Adjusted Performance

Very Weak

Over the last 90 days Universal Security Instruments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic 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.

Pair Trading with JetBlue Airways and Universal Security

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

The idea behind JetBlue Airways Corp and Universal Security Instruments 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.