Correlation Between Bluejay Diagnostics and Biofrontera

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

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

Diversification Opportunities for Bluejay Diagnostics and Biofrontera

0.48

Correlation Coefficient

Bluejay Diagnostics  Biofrontera

Very weak diversification

The 3 months correlation between Bluejay and Biofrontera is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bluejay Diagnostics and Biofrontera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofrontera and Bluejay Diagnostics 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 Bluejay Diagnostics are associated (or correlated) with Biofrontera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biofrontera has no effect on the direction of Bluejay Diagnostics i.e., Bluejay Diagnostics and Biofrontera go up and down completely randomly.

Pair Corralation between Bluejay Diagnostics and Biofrontera

Given the investment horizon of 90 days Bluejay Diagnostics is expected to under-perform the Biofrontera. In addition to that, Bluejay Diagnostics is 1.65 times more volatile than Biofrontera. It trades about -0.08 of its total potential returns per unit of risk. Biofrontera is currently generating about 0.05 per unit of volatility. If you would invest  90.00  in Biofrontera on September 26, 2024 and sell it today you would earn a total of  11.00  from holding Biofrontera or generate 12.22% return on investment over 90 days.

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

Bluejay Diagnostics  vs.  Biofrontera

Bluejay Diagnostics

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bluejay Diagnostics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, Bluejay Diagnostics showed solid returns over the last few months and may actually be approaching a breakup point.

Biofrontera

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biofrontera has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Biofrontera is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Bluejay Diagnostics and Biofrontera

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

The idea behind Bluejay Diagnostics and Biofrontera 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..