Correlation Between Bluejay Diagnostics and Bone Biologics

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

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

Diversification Opportunities for Bluejay Diagnostics and Bone Biologics

0.18

Correlation Coefficient

Bluejay Diagnostics  Bone Biologics

Average diversification

The 3 months correlation between Bluejay and Bone is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bluejay Diagnostics and Bone Biologics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bone Biologics Corp and Bluejay Diagnostics 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 Bluejay Diagnostics are associated (or correlated) with Bone Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bone Biologics Corp has no effect on the direction of Bluejay Diagnostics i.e., Bluejay Diagnostics and Bone Biologics go up and down completely randomly.

Pair Corralation between Bluejay Diagnostics and Bone Biologics

Given the investment horizon of 90 days Bluejay Diagnostics is expected to under-perform the Bone Biologics. But the stock apears to be less risky and, when comparing its historical volatility, Bluejay Diagnostics is 1.45 times less risky than Bone Biologics. The stock trades about -0.06 of its potential returns per unit of risk. The Bone Biologics Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  140.00  in Bone Biologics Corp on August 30, 2024 and sell it today you would lose (14.00) from holding Bone Biologics Corp or give up 10.0% of portfolio value over 90 days.

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

Bluejay Diagnostics  vs.  Bone Biologics Corp

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 fragile performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Bone Biologics Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bone Biologics Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal essential indicators, Bone Biologics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bluejay Diagnostics and Bone Biologics

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

The idea behind Bluejay Diagnostics and Bone Biologics Corp 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.