Correlation Between Blue Jet and Hilton Metal

Can any of the company-specific risk be diversified away by investing in both Blue Jet and Hilton Metal 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 Hilton Metal 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 Hilton Metal Forging, you can compare the effects of market volatilities on Blue Jet and Hilton Metal 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 Hilton Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Jet and Hilton Metal.

Diversification Opportunities for Blue Jet and Hilton Metal

-0.06

Correlation Coefficient

Blue Jet  Hilton Metal

Good diversification

The 3 months correlation between Blue and Hilton is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Blue Jet Healthcare and Hilton Metal Forging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilton Metal Forging 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 Hilton Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilton Metal Forging has no effect on the direction of Blue Jet i.e., Blue Jet and Hilton Metal go up and down completely randomly.

Pair Corralation between Blue Jet and Hilton Metal

Assuming the 90 days trading horizon Blue Jet is expected to generate 13.25 times less return on investment than Hilton Metal. In addition to that, Blue Jet is 1.04 times more volatile than Hilton Metal Forging. It trades about 0.0 of its total potential returns per unit of risk. Hilton Metal Forging is currently generating about 0.03 per unit of volatility. If you would invest  9,220  in Hilton Metal Forging on September 12, 2024 and sell it today you would earn a total of  266.00  from holding Hilton Metal Forging or generate 2.89% return on investment over 90 days.

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

Blue Jet Healthcare  vs.  Hilton Metal Forging

Blue Jet Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Jet Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking indicators, Blue Jet is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Hilton Metal Forging

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hilton Metal Forging are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Hilton Metal is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blue Jet and Hilton Metal

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

The idea behind Blue Jet Healthcare and Hilton Metal Forging 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.