Correlation Between Bluejay Diagnostics and Beyond Air

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

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

Diversification Opportunities for Bluejay Diagnostics and Beyond Air

-0.69

Correlation Coefficient

Bluejay Diagnostics  Beyond Air

Excellent diversification

The 3 months correlation between Bluejay and Beyond is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bluejay Diagnostics and Beyond Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Air 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 Beyond Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Air has no effect on the direction of Bluejay Diagnostics i.e., Bluejay Diagnostics and Beyond Air go up and down completely randomly.

Pair Corralation between Bluejay Diagnostics and Beyond Air

Given the investment horizon of 90 days Bluejay Diagnostics is expected to generate 2.55 times less return on investment than Beyond Air. In addition to that, Bluejay Diagnostics is 2.14 times more volatile than Beyond Air. It trades about 0.01 of its total potential returns per unit of risk. Beyond Air is currently generating about 0.05 per unit of volatility. If you would invest  38.00  in Beyond Air on September 22, 2024 and sell it today you would earn a total of  2.00  from holding Beyond Air or generate 5.26% return on investment over 90 days.

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

Bluejay Diagnostics  vs.  Beyond Air

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 inconsistent fundamental indicators, Bluejay Diagnostics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Beyond Air

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Beyond Air are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent forward indicators, Beyond Air reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bluejay Diagnostics and Beyond Air

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

The idea behind Bluejay Diagnostics and Beyond Air 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.