Correlation Between JetBlue Airways and Delta Air

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both JetBlue Airways and Delta Air 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 Delta Air 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 Delta Air Lines, you can compare the effects of market volatilities on JetBlue Airways and Delta Air 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 Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of JetBlue Airways and Delta Air.

Diversification Opportunities for JetBlue Airways and Delta Air

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between JetBlue and Delta is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding JetBlue Airways Corp and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines 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 Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of JetBlue Airways i.e., JetBlue Airways and Delta Air go up and down completely randomly.

Pair Corralation between JetBlue Airways and Delta Air

Given the investment horizon of 90 days JetBlue Airways Corp is expected to under-perform the Delta Air. In addition to that, JetBlue Airways is 1.52 times more volatile than Delta Air Lines. It trades about -0.01 of its total potential returns per unit of risk. Delta Air Lines is currently generating about 0.03 per unit of volatility. If you would invest  3,793  in Delta Air Lines on December 30, 2023 and sell it today you would earn a total of  994.00  from holding Delta Air Lines or generate 26.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

JetBlue Airways Corp  vs.  Delta Air Lines

 Performance 
       Timeline  
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 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 and Delta Air Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JetBlue Airways and Delta Air

The main advantage of trading using opposite JetBlue Airways and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JetBlue Airways position performs unexpectedly, Delta Air 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 Delta Air will offset losses from the drop in Delta Air's long position.
The idea behind JetBlue Airways Corp and Delta Air Lines 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

Other Complementary Tools

Transaction History
View history of all your transactions and understand their impact on performance
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.