Correlation Between Blue Coast and HEG
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By analyzing existing cross correlation between Blue Coast Hotels and HEG Limited, you can compare the effects of market volatilities on Blue Coast and HEG 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 Coast with a short position of HEG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Coast and HEG.
Diversification Opportunities for Blue Coast and HEG
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Blue and HEG is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Blue Coast Hotels and HEG Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEG Limited and Blue Coast 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 Coast Hotels are associated (or correlated) with HEG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEG Limited has no effect on the direction of Blue Coast i.e., Blue Coast and HEG go up and down completely randomly.
Pair Corralation between Blue Coast and HEG
Assuming the 90 days trading horizon Blue Coast Hotels is expected to generate 1.48 times more return on investment than HEG. However, Blue Coast is 1.48 times more volatile than HEG Limited. It trades about 0.84 of its potential returns per unit of risk. HEG Limited is currently generating about -0.39 per unit of risk. If you would invest 1,293 in Blue Coast Hotels on October 23, 2024 and sell it today you would earn a total of 1,244 from holding Blue Coast Hotels or generate 96.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Coast Hotels vs. HEG Limited
Performance |
| Timeline |
| Blue Coast Hotels |
| HEG Limited |
Blue Coast and HEG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Coast and HEG
The main advantage of trading using opposite Blue Coast and HEG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Coast position performs unexpectedly, HEG 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 HEG will offset losses from the drop in HEG's long position.| Blue Coast vs. Reliance Industries Limited | Blue Coast vs. Life Insurance | Blue Coast vs. Indian Oil | Blue Coast vs. Oil Natural Gas |
| HEG vs. Blue Coast Hotels | HEG vs. Lemon Tree Hotels | HEG vs. Associated Alcohols Breweries | HEG vs. Ravi Kumar Distilleries |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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