Correlation Between Aster DM and Blue Jet

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

By analyzing existing cross correlation between Aster DM Healthcare and Blue Jet Healthcare, you can compare the effects of market volatilities on Aster DM and Blue Jet 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 Aster DM with a short position of Blue Jet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aster DM and Blue Jet.

Diversification Opportunities for Aster DM and Blue Jet

-0.78

Correlation Coefficient

Aster DM  Blue Jet

Pay attention - limited upside

The 3 months correlation between Aster and Blue is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Aster DM Healthcare and Blue Jet Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Jet Healthcare and Aster DM 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 Aster DM Healthcare are associated (or correlated) with Blue Jet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Jet Healthcare has no effect on the direction of Aster DM i.e., Aster DM and Blue Jet go up and down completely randomly.

Pair Corralation between Aster DM and Blue Jet

Assuming the 90 days trading horizon Aster DM Healthcare is expected to under-perform the Blue Jet. But the stock apears to be less risky and, when comparing its historical volatility, Aster DM Healthcare is 1.83 times less risky than Blue Jet. The stock trades about -0.12 of its potential returns per unit of risk. The Blue Jet Healthcare is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  55,290  in Blue Jet Healthcare on December 25, 2024 and sell it today you would earn a total of  35,100  from holding Blue Jet Healthcare or generate 63.48% return on investment over 90 days.

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

Aster DM Healthcare  vs.  Blue Jet Healthcare

Aster DM Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aster DM Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Blue Jet Healthcare

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Jet Healthcare are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking indicators, Blue Jet unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aster DM and Blue Jet

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

The idea behind Aster DM Healthcare and Blue Jet Healthcare 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.