Correlation Between Nexalin Technology and Bluejay Diagnostics

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

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

Diversification Opportunities for Nexalin Technology and Bluejay Diagnostics

-0.4

Correlation Coefficient

Nexalin Technology  Bluejay Diagnostics

Very good diversification

The 3 months correlation between Nexalin and Bluejay is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nexalin Technology and Bluejay Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluejay Diagnostics and Nexalin Technology 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 Nexalin Technology 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 Nexalin Technology i.e., Nexalin Technology and Bluejay Diagnostics go up and down completely randomly.

Pair Corralation between Nexalin Technology and Bluejay Diagnostics

Considering the 90-day investment horizon Nexalin Technology is expected to under-perform the Bluejay Diagnostics. But the stock apears to be less risky and, when comparing its historical volatility, Nexalin Technology is 1.05 times less risky than Bluejay Diagnostics. The stock trades about -0.06 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

Nexalin Technology  vs.  Bluejay Diagnostics

Nexalin Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nexalin Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional 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 Nexalin Technology and Bluejay Diagnostics

The main advantage of trading using opposite Nexalin Technology and Bluejay Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexalin Technology 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 Nexalin Technology 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.