Correlation Between NRx Pharmaceuticals and Bluejay Diagnostics

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

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

Diversification Opportunities for NRx Pharmaceuticals and Bluejay Diagnostics

0.12

Correlation Coefficient

NRx Pharmaceuticals  Bluejay Diagnostics

Average diversification

The 3 months correlation between NRx and Bluejay is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding NRx Pharmaceuticals and Bluejay Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluejay Diagnostics and NRx Pharmaceuticals 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 NRx Pharmaceuticals 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 NRx Pharmaceuticals i.e., NRx Pharmaceuticals and Bluejay Diagnostics go up and down completely randomly.

Pair Corralation between NRx Pharmaceuticals and Bluejay Diagnostics

Assuming the 90 days horizon NRx Pharmaceuticals is expected to generate 1.18 times more return on investment than Bluejay Diagnostics. However, NRx Pharmaceuticals is 1.18 times more volatile than Bluejay Diagnostics. It trades about 0.25 of its potential returns per unit of risk. Bluejay Diagnostics is currently generating about 0.03 per unit of risk. If you would invest  5.48  in NRx Pharmaceuticals on October 14, 2024 and sell it today you would earn a total of  28.52  from holding NRx Pharmaceuticals or generate 520.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	88.71%
Values	Daily Returns

NRx Pharmaceuticals  vs.  Bluejay Diagnostics

NRx Pharmaceuticals

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NRx Pharmaceuticals are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, NRx Pharmaceuticals 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 NRx Pharmaceuticals and Bluejay Diagnostics

The main advantage of trading using opposite NRx Pharmaceuticals and Bluejay Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NRx Pharmaceuticals 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 NRx Pharmaceuticals 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.