Correlation Between JetBlue Airways and IShares SP

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

Diversification Opportunities for JetBlue Airways and IShares SP

-0.18

Correlation Coefficient

JetBlue Airways  IShares SP

Good diversification

The 3 months correlation between JetBlue and IShares is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and iShares SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SP Global 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 IShares SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SP Global has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and IShares SP go up and down completely randomly.

Pair Corralation between JetBlue Airways and IShares SP

Given the investment horizon of 90 days JetBlue Airways Corp is expected to under-perform the IShares SP. In addition to that, JetBlue Airways is 5.17 times more volatile than iShares SP Global. It trades about -0.09 of its total potential returns per unit of risk. iShares SP Global is currently generating about 0.06 per unit of volatility. If you would invest  5,324  in iShares SP Global on December 22, 2024 and sell it today you would earn a total of  187.00  from holding iShares SP Global or generate 3.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

JetBlue Airways Corp  vs.  iShares SP Global

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.

iShares SP Global

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares SP Global are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, IShares SP is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with JetBlue Airways and IShares SP

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

The idea behind JetBlue Airways Corp and iShares SP Global 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.