Correlation Between Pasithea Therapeutics and Bluejay Diagnostics

Can any of the company-specific risk be diversified away by investing in both Pasithea Therapeutics and Bluejay Diagnostics 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 Pasithea Therapeutics and Bluejay Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pasithea Therapeutics Corp and Bluejay Diagnostics, you can compare the effects of market volatilities on Pasithea Therapeutics and Bluejay Diagnostics 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 Pasithea Therapeutics with a short position of Bluejay Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pasithea Therapeutics and Bluejay Diagnostics.

Diversification Opportunities for Pasithea Therapeutics and Bluejay Diagnostics

-0.51

Correlation Coefficient

Pasithea Therapeutics  Bluejay Diagnostics

Excellent diversification

The 3 months correlation between Pasithea and Bluejay is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Pasithea Therapeutics Corp and Bluejay Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluejay Diagnostics and Pasithea Therapeutics 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 Pasithea Therapeutics Corp are associated (or correlated) with Bluejay Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluejay Diagnostics has no effect on the direction of Pasithea Therapeutics i.e., Pasithea Therapeutics and Bluejay Diagnostics go up and down completely randomly.

Pair Corralation between Pasithea Therapeutics and Bluejay Diagnostics

Assuming the 90 days horizon Pasithea Therapeutics Corp is expected to generate 1.51 times more return on investment than Bluejay Diagnostics. However, Pasithea Therapeutics is 1.51 times more volatile than Bluejay Diagnostics. It trades about 0.14 of its potential returns per unit of risk. Bluejay Diagnostics is currently generating about 0.03 per unit of risk. If you would invest  2.67  in Pasithea Therapeutics Corp on October 14, 2024 and sell it today you would earn a total of  0.79  from holding Pasithea Therapeutics Corp or generate 29.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	48.39%
Values	Daily Returns

Pasithea Therapeutics Corp  vs.  Bluejay Diagnostics

Pasithea Therapeutics

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pasithea Therapeutics Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Pasithea Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Bluejay Diagnostics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bluejay Diagnostics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, Bluejay Diagnostics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pasithea Therapeutics and Bluejay Diagnostics

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

The idea behind Pasithea Therapeutics Corp and Bluejay Diagnostics 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.