Correlation Between Bluejay Diagnostics and Biomerica

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

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

Diversification Opportunities for Bluejay Diagnostics and Biomerica

-0.09

Correlation Coefficient

Bluejay Diagnostics  Biomerica

Good diversification

The 3 months correlation between Bluejay and Biomerica is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bluejay Diagnostics and Biomerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomerica 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 Biomerica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomerica has no effect on the direction of Bluejay Diagnostics i.e., Bluejay Diagnostics and Biomerica go up and down completely randomly.

Pair Corralation between Bluejay Diagnostics and Biomerica

Given the investment horizon of 90 days Bluejay Diagnostics is expected to generate 8.51 times less return on investment than Biomerica. But when comparing it to its historical volatility, Bluejay Diagnostics is 2.26 times less risky than Biomerica. It trades about 0.03 of its potential returns per unit of risk. Biomerica is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  31.00  in Biomerica on December 30, 2024 and sell it today you would earn a total of  27.00  from holding Biomerica or generate 87.1% return on investment over 90 days.

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

Bluejay Diagnostics  vs.  Biomerica

Bluejay Diagnostics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bluejay Diagnostics are ranked lower than 2 (%) 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.

Biomerica

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Biomerica are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Biomerica sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bluejay Diagnostics and Biomerica

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

The idea behind Bluejay Diagnostics and Biomerica 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.