Correlation Between Blue Jet and JTL Industries

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

Diversification Opportunities for Blue Jet and JTL Industries

-0.35

Correlation Coefficient

Blue Jet  JTL Industries

Very good diversification

The 3 months correlation between Blue and JTL is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Blue Jet Healthcare and JTL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JTL Industries 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 JTL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JTL Industries has no effect on the direction of Blue Jet i.e., Blue Jet and JTL Industries go up and down completely randomly.

Pair Corralation between Blue Jet and JTL Industries

Assuming the 90 days trading horizon Blue Jet Healthcare is expected to generate 1.67 times more return on investment than JTL Industries. However, Blue Jet is 1.67 times more volatile than JTL Industries. It trades about 0.09 of its potential returns per unit of risk. JTL Industries is currently generating about 0.05 per unit of risk. If you would invest  54,995  in Blue Jet Healthcare on September 20, 2024 and sell it today you would earn a total of  2,350  from holding Blue Jet Healthcare or generate 4.27% 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.  JTL Industries

Blue Jet Healthcare

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Jet Healthcare are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward-looking indicators, Blue Jet may actually be approaching a critical reversion point that can send shares even higher in January 2025.

JTL Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JTL Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Blue Jet and JTL Industries

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

The idea behind Blue Jet Healthcare and JTL Industries 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.