Correlation Between Curtiss Wright and JetBlue Airways

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

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

Diversification Opportunities for Curtiss Wright and JetBlue Airways

-0.8

Correlation Coefficient

Curtiss Wright  JetBlue Airways

Pay attention - limited upside

The 3 months correlation between Curtiss and JetBlue is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright 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 Curtiss Wright 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 Curtiss Wright 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 Curtiss Wright i.e., Curtiss Wright and JetBlue Airways go up and down completely randomly.

Pair Corralation between Curtiss Wright and JetBlue Airways

Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 0.35 times more return on investment than JetBlue Airways. However, Curtiss Wright is 2.83 times less risky than JetBlue Airways. It trades about -0.09 of its potential returns per unit of risk. JetBlue Airways Corp is currently generating about -0.04 per unit of risk. If you would invest  27,708  in Curtiss Wright on March 10, 2024 and sell it today you would lose (553.00) from holding Curtiss Wright or give up 2.0% of portfolio value over 90 days.

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

Curtiss Wright  vs.  JetBlue Airways Corp

Curtiss Wright

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Curtiss Wright are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Curtiss Wright showed solid returns over the last few months and may actually be approaching a breakup point.

JetBlue Airways Corp

Risk-Adjusted Performance

0 of 100

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 July 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Curtiss Wright and JetBlue Airways

The main advantage of trading using opposite Curtiss Wright and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Wright 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 Curtiss Wright 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.