Correlation Between UNITEDHEALTH and JetBlue Airways

Can any of the company-specific risk be diversified away by investing in both UNITEDHEALTH and JetBlue Airways 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 UNITEDHEALTH and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UNITEDHEALTH GROUP INC and JetBlue Airways Corp, you can compare the effects of market volatilities on UNITEDHEALTH and JetBlue Airways 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 UNITEDHEALTH with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITEDHEALTH and JetBlue Airways.

Diversification Opportunities for UNITEDHEALTH and JetBlue Airways

-0.01

Correlation Coefficient

UNITEDHEALTH  JetBlue Airways

Good diversification

The 3 months correlation between UNITEDHEALTH and JetBlue is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding UNITEDHEALTH GROUP INC and JetBlue Airways Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JetBlue Airways Corp and UNITEDHEALTH 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 UNITEDHEALTH GROUP INC are associated (or correlated) with JetBlue Airways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JetBlue Airways Corp has no effect on the direction of UNITEDHEALTH i.e., UNITEDHEALTH and JetBlue Airways go up and down completely randomly.

Pair Corralation between UNITEDHEALTH and JetBlue Airways

Assuming the 90 days trading horizon UNITEDHEALTH GROUP INC is expected to under-perform the JetBlue Airways. But the bond apears to be less risky and, when comparing its historical volatility, UNITEDHEALTH GROUP INC is 3.1 times less risky than JetBlue Airways. The bond trades about 0.0 of its potential returns per unit of risk. The JetBlue Airways Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  824.00  in JetBlue Airways Corp on October 4, 2024 and sell it today you would lose (65.50) from holding JetBlue Airways Corp or give up 7.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.98%
Values	Daily Returns

UNITEDHEALTH GROUP INC  vs.  JetBlue Airways Corp

UNITEDHEALTH GROUP INC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in UNITEDHEALTH GROUP INC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, UNITEDHEALTH is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

JetBlue Airways Corp

Risk-Adjusted Performance

3 of 100

Insignificant

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.

Pair Trading with UNITEDHEALTH and JetBlue Airways

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

The idea behind UNITEDHEALTH GROUP INC and JetBlue Airways Corp 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.