Correlation Between Blue Jet and Baazar Style

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

Diversification Opportunities for Blue Jet and Baazar Style

-0.6

Correlation Coefficient

Blue Jet  Baazar Style

Excellent diversification

The 3 months correlation between Blue and Baazar is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Blue Jet Healthcare and Baazar Style Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baazar Style Retail 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 Baazar Style. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baazar Style Retail has no effect on the direction of Blue Jet i.e., Blue Jet and Baazar Style go up and down completely randomly.

Pair Corralation between Blue Jet and Baazar Style

Assuming the 90 days trading horizon Blue Jet Healthcare is expected to generate 0.82 times more return on investment than Baazar Style. However, Blue Jet Healthcare is 1.21 times less risky than Baazar Style. It trades about 0.14 of its potential returns per unit of risk. Baazar Style Retail is currently generating about -0.04 per unit of risk. If you would invest  48,360  in Blue Jet Healthcare on October 23, 2024 and sell it today you would earn a total of  11,420  from holding Blue Jet Healthcare or generate 23.61% return on investment over 90 days.

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

Blue Jet Healthcare  vs.  Baazar Style Retail

Blue Jet Healthcare

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Jet Healthcare are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting forward-looking indicators, Blue Jet unveiled solid returns over the last few months and may actually be approaching a breakup point.

Baazar Style Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baazar Style Retail has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Blue Jet and Baazar Style

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

The idea behind Blue Jet Healthcare and Baazar Style Retail 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.