Correlation Between JetBlue Airways and Vanguard Mega

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

Diversification Opportunities for JetBlue Airways and Vanguard Mega

0.4

Correlation Coefficient

JetBlue Airways  Vanguard Mega

Very weak diversification

The 3 months correlation between JetBlue and Vanguard is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Vanguard Mega Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Mega Cap 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 Vanguard Mega. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Mega Cap has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Vanguard Mega go up and down completely randomly.

Pair Corralation between JetBlue Airways and Vanguard Mega

Given the investment horizon of 90 days JetBlue Airways Corp is expected to generate 1.81 times more return on investment than Vanguard Mega. However, JetBlue Airways is 1.81 times more volatile than Vanguard Mega Cap. It trades about 0.0 of its potential returns per unit of risk. Vanguard Mega Cap is currently generating about -0.06 per unit of risk. If you would invest  768.00  in JetBlue Airways Corp on October 23, 2024 and sell it today you would lose (4.00) from holding JetBlue Airways Corp or give up 0.52% of portfolio value over 90 days.

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

JetBlue Airways Corp  vs.  Vanguard Mega Cap

JetBlue Airways Corp

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JetBlue Airways Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady essential indicators, JetBlue Airways may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Vanguard Mega Cap

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Mega Cap are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vanguard Mega may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with JetBlue Airways and Vanguard Mega

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

The idea behind JetBlue Airways Corp and Vanguard Mega Cap 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.