Correlation Between NeuroMetrix and Bluejay Diagnostics

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

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

Diversification Opportunities for NeuroMetrix and Bluejay Diagnostics

-0.05

Correlation Coefficient

NeuroMetrix  Bluejay Diagnostics

Good diversification

The 3 months correlation between NeuroMetrix and Bluejay is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding NeuroMetrix and Bluejay Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluejay Diagnostics and NeuroMetrix 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 NeuroMetrix 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 NeuroMetrix i.e., NeuroMetrix and Bluejay Diagnostics go up and down completely randomly.

Pair Corralation between NeuroMetrix and Bluejay Diagnostics

Given the investment horizon of 90 days NeuroMetrix is expected to under-perform the Bluejay Diagnostics. But the stock apears to be less risky and, when comparing its historical volatility, NeuroMetrix is 6.78 times less risky than Bluejay Diagnostics. The stock trades about -0.14 of its potential returns per unit of risk. The Bluejay Diagnostics is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  375.00  in Bluejay Diagnostics on September 24, 2024 and sell it today you would earn a total of  9.00  from holding Bluejay Diagnostics or generate 2.4% return on investment over 90 days.

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

NeuroMetrix  vs.  Bluejay Diagnostics

NeuroMetrix

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NeuroMetrix are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, NeuroMetrix is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Bluejay Diagnostics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bluejay Diagnostics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly fragile fundamental indicators, Bluejay Diagnostics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with NeuroMetrix and Bluejay Diagnostics

The main advantage of trading using opposite NeuroMetrix and Bluejay Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeuroMetrix 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 NeuroMetrix 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.