Correlation Between Paramount Communications and Blue Coast
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By analyzing existing cross correlation between Paramount Communications Limited and Blue Coast Hotels, you can compare the effects of market volatilities on Paramount Communications and Blue Coast 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 Paramount Communications with a short position of Blue Coast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paramount Communications and Blue Coast.
Diversification Opportunities for Paramount Communications and Blue Coast
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Paramount and Blue is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Paramount Communications Limit and Blue Coast Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Coast Hotels and Paramount Communications 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 Paramount Communications Limited are associated (or correlated) with Blue Coast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Coast Hotels has no effect on the direction of Paramount Communications i.e., Paramount Communications and Blue Coast go up and down completely randomly.
Pair Corralation between Paramount Communications and Blue Coast
Assuming the 90 days trading horizon Paramount Communications Limited is expected to generate 1.82 times more return on investment than Blue Coast. However, Paramount Communications is 1.82 times more volatile than Blue Coast Hotels. It trades about -0.01 of its potential returns per unit of risk. Blue Coast Hotels is currently generating about -0.22 per unit of risk. If you would invest 7,117 in Paramount Communications Limited on August 30, 2024 and sell it today you would lose (64.00) from holding Paramount Communications Limited or give up 0.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paramount Communications Limit vs. Blue Coast Hotels
Performance |
| Timeline |
| Paramount Communications |
| Blue Coast Hotels |
Paramount Communications and Blue Coast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paramount Communications and Blue Coast
The main advantage of trading using opposite Paramount Communications and Blue Coast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paramount Communications position performs unexpectedly, Blue Coast 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 Coast will offset losses from the drop in Blue Coast's long position.| Paramount Communications vs. Reliance Industries Limited | Paramount Communications vs. Life Insurance | Paramount Communications vs. India Glycols Limited | Paramount Communications vs. Indo Borax Chemicals |
| Blue Coast vs. Hemisphere Properties India | Blue Coast vs. India Glycols Limited | Blue Coast vs. Indo Borax Chemicals | Blue Coast vs. Kingfa Science Technology |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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