Correlation Between Aegean Airlines and JetBlue Airways

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

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

Diversification Opportunities for Aegean Airlines and JetBlue Airways

0.02

Correlation Coefficient

Aegean Airlines  JetBlue Airways

Significant diversification

The 3 months correlation between Aegean and JetBlue is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA 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 Aegean Airlines 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 Aegean Airlines SA 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 Aegean Airlines i.e., Aegean Airlines and JetBlue Airways go up and down completely randomly.

Pair Corralation between Aegean Airlines and JetBlue Airways

Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the JetBlue Airways. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aegean Airlines SA is 3.26 times less risky than JetBlue Airways. The pink sheet trades about -0.21 of its potential returns per unit of risk. The JetBlue Airways Corp is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  596.00  in JetBlue Airways Corp on September 28, 2024 and sell it today you would earn a total of  186.00  from holding JetBlue Airways Corp or generate 31.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.91%
Values	Daily Returns

Aegean Airlines SA  vs.  JetBlue Airways Corp

Aegean Airlines SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aegean Airlines SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

JetBlue Airways Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JetBlue Airways Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady essential indicators, JetBlue Airways unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aegean Airlines and JetBlue Airways

The main advantage of trading using opposite Aegean Airlines and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines 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 Aegean Airlines SA 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 Commodity Directory module to find actively traded commodities issued by global exchanges.