Correlation Between Blue Jet and CSB Bank

Can any of the company-specific risk be diversified away by investing in both Blue Jet and CSB Bank 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 CSB Bank 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 CSB Bank Limited, you can compare the effects of market volatilities on Blue Jet and CSB Bank 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 CSB Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Jet and CSB Bank.

Diversification Opportunities for Blue Jet and CSB Bank

0.8

Correlation Coefficient

Blue Jet  CSB Bank

Very poor diversification

The 3 months correlation between Blue and CSB is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Blue Jet Healthcare and CSB Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSB Bank Limited 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 CSB Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSB Bank Limited has no effect on the direction of Blue Jet i.e., Blue Jet and CSB Bank go up and down completely randomly.

Pair Corralation between Blue Jet and CSB Bank

Assuming the 90 days trading horizon Blue Jet Healthcare is expected to generate 1.87 times more return on investment than CSB Bank. However, Blue Jet is 1.87 times more volatile than CSB Bank Limited. It trades about 0.19 of its potential returns per unit of risk. CSB Bank Limited is currently generating about 0.2 per unit of risk. If you would invest  74,240  in Blue Jet Healthcare on April 21, 2025 and sell it today you would earn a total of  26,780  from holding Blue Jet Healthcare or generate 36.07% return on investment over 90 days.

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

Blue Jet Healthcare  vs.  CSB Bank Limited

Blue Jet Healthcare

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Jet Healthcare are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking indicators, Blue Jet unveiled solid returns over the last few months and may actually be approaching a breakup point.

CSB Bank Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CSB Bank Limited are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, CSB Bank disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blue Jet and CSB Bank

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

The idea behind Blue Jet Healthcare and CSB Bank Limited 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.