Correlation Between Blue Jet and R S

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

Diversification Opportunities for Blue Jet and R S

-0.69

Correlation Coefficient

Blue Jet  R S

Excellent diversification

The 3 months correlation between Blue and RSSOFTWARE is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Blue Jet Healthcare and R S Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on R S Software 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 R S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of R S Software has no effect on the direction of Blue Jet i.e., Blue Jet and R S go up and down completely randomly.

Pair Corralation between Blue Jet and R S

Assuming the 90 days trading horizon Blue Jet is expected to generate 2.95 times less return on investment than R S. But when comparing it to its historical volatility, Blue Jet Healthcare is 1.37 times less risky than R S. It trades about 0.06 of its potential returns per unit of risk. R S Software is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,577  in R S Software on October 22, 2024 and sell it today you would earn a total of  15,089  from holding R S Software or generate 585.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	61.68%
Values	Daily Returns

Blue Jet Healthcare  vs.  R S Software

Blue Jet Healthcare

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Jet Healthcare are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking indicators, Blue Jet unveiled solid returns over the last few months and may actually be approaching a breakup point.

R S Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days R S Software has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Blue Jet and R S

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

The idea behind Blue Jet Healthcare and R S Software 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.