Correlation Between Delta Air and JetBlue Airways

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Delta Air 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 Delta Air and JetBlue Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Air Lines and JetBlue Airways Corp, you can compare the effects of market volatilities on Delta Air 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 Delta Air with a short position of JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and JetBlue Airways.

Diversification Opportunities for Delta Air and JetBlue Airways

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Delta and JetBlue is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines 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 Delta Air 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 Delta Air Lines 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 Delta Air i.e., Delta Air and JetBlue Airways go up and down completely randomly.

Pair Corralation between Delta Air and JetBlue Airways

Considering the 90-day investment horizon Delta Air is expected to generate 1.16 times less return on investment than JetBlue Airways. But when comparing it to its historical volatility, Delta Air Lines is 2.04 times less risky than JetBlue Airways. It trades about 0.43 of its potential returns per unit of risk. JetBlue Airways Corp is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  642.00  in JetBlue Airways Corp on December 30, 2023 and sell it today you would earn a total of  100.00  from holding JetBlue Airways Corp or generate 15.58% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Delta Air Lines  vs.  JetBlue Airways Corp

 Performance 
       Timeline  
Delta Air Lines 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Delta Air Lines are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Delta Air disclosed solid returns over the last few months and may actually be approaching a breakup point.
JetBlue Airways Corp 

Risk-Adjusted Performance

10 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in JetBlue Airways Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, JetBlue Airways unveiled solid returns over the last few months and may actually be approaching a breakup point.

Delta Air and JetBlue Airways Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Delta Air and JetBlue Airways

The main advantage of trading using opposite Delta Air and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air 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 Delta Air Lines 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.
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

Other Complementary Tools

Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
AI Investment Finder
Use AI to screen and filter profitable investment opportunities