Correlation Between Blue Jet and Nahar Industrial

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

By analyzing existing cross correlation between Blue Jet Healthcare and Nahar Industrial Enterprises, you can compare the effects of market volatilities on Blue Jet and Nahar Industrial 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 Blue Jet with a short position of Nahar Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Jet and Nahar Industrial.

Diversification Opportunities for Blue Jet and Nahar Industrial

0.0

Correlation Coefficient

Blue Jet  Nahar Industrial

Pay attention - limited upside

The 3 months correlation between Blue and Nahar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Blue Jet Healthcare and Nahar Industrial Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nahar Industrial Ent and Blue Jet 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 Blue Jet Healthcare are associated (or correlated) with Nahar Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nahar Industrial Ent has no effect on the direction of Blue Jet i.e., Blue Jet and Nahar Industrial go up and down completely randomly.

Pair Corralation between Blue Jet and Nahar Industrial

Assuming the 90 days trading horizon Blue Jet Healthcare is expected to generate 1.28 times more return on investment than Nahar Industrial. However, Blue Jet is 1.28 times more volatile than Nahar Industrial Enterprises. It trades about 0.05 of its potential returns per unit of risk. Nahar Industrial Enterprises is currently generating about 0.04 per unit of risk. If you would invest  51,310  in Blue Jet Healthcare on September 19, 2024 and sell it today you would earn a total of  3,090  from holding Blue Jet Healthcare or generate 6.02% return on investment over 90 days.

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

Blue Jet Healthcare  vs.  Nahar Industrial Enterprises

Blue Jet Healthcare

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Jet Healthcare are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady forward-looking indicators, Blue Jet may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nahar Industrial Ent

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nahar Industrial Enterprises are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Nahar Industrial is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Blue Jet and Nahar Industrial

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

The idea behind Blue Jet Healthcare and Nahar Industrial Enterprises 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.