Correlation Between Blue Jet and Indian Renewable

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

Diversification Opportunities for Blue Jet and Indian Renewable

-0.84

Correlation Coefficient

Blue Jet  Indian Renewable

Pay attention - limited upside

The 3 months correlation between Blue and Indian is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Blue Jet Healthcare and Indian Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Renewable Energy 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 Indian Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Renewable Energy has no effect on the direction of Blue Jet i.e., Blue Jet and Indian Renewable go up and down completely randomly.

Pair Corralation between Blue Jet and Indian Renewable

Assuming the 90 days trading horizon Blue Jet Healthcare is expected to generate 0.95 times more return on investment than Indian Renewable. However, Blue Jet Healthcare is 1.05 times less risky than Indian Renewable. It trades about 0.26 of its potential returns per unit of risk. Indian Renewable Energy is currently generating about -0.11 per unit of risk. If you would invest  55,300  in Blue Jet Healthcare on December 24, 2024 and sell it today you would earn a total of  35,395  from holding Blue Jet Healthcare or generate 64.01% return on investment over 90 days.

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

Blue Jet Healthcare  vs.  Indian Renewable Energy

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 unfluctuating forward-looking indicators, Blue Jet unveiled solid returns over the last few months and may actually be approaching a breakup point.

Indian Renewable Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Indian Renewable Energy 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 technical and fundamental 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.

Pair Trading with Blue Jet and Indian Renewable

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

The idea behind Blue Jet Healthcare and Indian Renewable Energy 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.