Correlation Between Blue Jet and COSMO FIRST

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

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

Diversification Opportunities for Blue Jet and COSMO FIRST

0.65

Correlation Coefficient

Blue Jet  COSMO FIRST

Poor diversification

The 3 months correlation between Blue and COSMO is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Blue Jet Healthcare and COSMO FIRST LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMO FIRST LIMITED and Blue Jet 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 Blue Jet Healthcare are associated (or correlated) with COSMO FIRST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMO FIRST LIMITED has no effect on the direction of Blue Jet i.e., Blue Jet and COSMO FIRST go up and down completely randomly.

Pair Corralation between Blue Jet and COSMO FIRST

Assuming the 90 days trading horizon Blue Jet Healthcare is expected to generate 0.96 times more return on investment than COSMO FIRST. However, Blue Jet Healthcare is 1.04 times less risky than COSMO FIRST. It trades about 0.06 of its potential returns per unit of risk. COSMO FIRST LIMITED is currently generating about 0.03 per unit of risk. If you would invest  41,261  in Blue Jet Healthcare on October 20, 2024 and sell it today you would earn a total of  18,344  from holding Blue Jet Healthcare or generate 44.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	61.73%
Values	Daily Returns

Blue Jet Healthcare  vs.  COSMO FIRST LIMITED

Blue Jet Healthcare

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Jet Healthcare are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating forward-looking indicators, Blue Jet unveiled solid returns over the last few months and may actually be approaching a breakup point.

COSMO FIRST LIMITED

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in COSMO FIRST LIMITED are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, COSMO FIRST demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blue Jet and COSMO FIRST

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

The idea behind Blue Jet Healthcare and COSMO FIRST LIMITED 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.