Correlation Between Himadri Speciality and Blue Jet

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

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

Diversification Opportunities for Himadri Speciality and Blue Jet

-0.06

Correlation Coefficient

Himadri Speciality  Blue Jet

Good diversification

The 3 months correlation between Himadri and Blue is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Himadri Speciality Chemical and Blue Jet Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Jet Healthcare and Himadri Speciality 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 Himadri Speciality Chemical are associated (or correlated) with Blue Jet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Jet Healthcare has no effect on the direction of Himadri Speciality i.e., Himadri Speciality and Blue Jet go up and down completely randomly.

Pair Corralation between Himadri Speciality and Blue Jet

Assuming the 90 days trading horizon Himadri Speciality is expected to generate 4.67 times less return on investment than Blue Jet. In addition to that, Himadri Speciality is 1.04 times more volatile than Blue Jet Healthcare. It trades about 0.02 of its total potential returns per unit of risk. Blue Jet Healthcare is currently generating about 0.08 per unit of volatility. If you would invest  47,778  in Blue Jet Healthcare on September 5, 2024 and sell it today you would earn a total of  5,307  from holding Blue Jet Healthcare or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Himadri Speciality Chemical  vs.  Blue Jet Healthcare

Himadri Speciality

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Himadri Speciality Chemical are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Himadri Speciality is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Blue Jet Healthcare

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Jet Healthcare are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady forward-looking indicators, Blue Jet unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Himadri Speciality and Blue Jet

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

The idea behind Himadri Speciality Chemical and Blue Jet Healthcare 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.