Correlation Between EnVVeno Medical and Bluejay Diagnostics

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

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

Diversification Opportunities for EnVVeno Medical and Bluejay Diagnostics

-0.28

Correlation Coefficient

EnVVeno Medical  Bluejay Diagnostics

Very good diversification

The 3 months correlation between EnVVeno and Bluejay is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding enVVeno Medical Corp and Bluejay Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluejay Diagnostics and EnVVeno Medical 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 enVVeno Medical 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 EnVVeno Medical i.e., EnVVeno Medical and Bluejay Diagnostics go up and down completely randomly.

Pair Corralation between EnVVeno Medical and Bluejay Diagnostics

Given the investment horizon of 90 days enVVeno Medical Corp is expected to under-perform the Bluejay Diagnostics. But the stock apears to be less risky and, when comparing its historical volatility, enVVeno Medical Corp is 1.88 times less risky than Bluejay Diagnostics. The stock trades about -0.02 of its potential returns per unit of risk. The Bluejay Diagnostics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  385.00  in Bluejay Diagnostics on December 29, 2024 and sell it today you would lose (1.00) from holding Bluejay Diagnostics or give up 0.26% of portfolio value over 90 days.

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

enVVeno Medical Corp  vs.  Bluejay Diagnostics

enVVeno Medical Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days enVVeno Medical Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, EnVVeno Medical 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

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 EnVVeno Medical and Bluejay Diagnostics

The main advantage of trading using opposite EnVVeno Medical and Bluejay Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EnVVeno Medical 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 enVVeno Medical 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.