Correlation Between Blue Coast and Akme Fintrade

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

By analyzing existing cross correlation between Blue Coast Hotels and Akme Fintrade India, you can compare the effects of market volatilities on Blue Coast and Akme Fintrade 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 Akme Fintrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Coast and Akme Fintrade.

Diversification Opportunities for Blue Coast and Akme Fintrade

-0.62

Correlation Coefficient

Blue Coast  Akme Fintrade

Excellent diversification

The 3 months correlation between Blue and Akme is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Blue Coast Hotels and Akme Fintrade India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akme Fintrade India 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 Akme Fintrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akme Fintrade India has no effect on the direction of Blue Coast i.e., Blue Coast and Akme Fintrade go up and down completely randomly.

Pair Corralation between Blue Coast and Akme Fintrade

Assuming the 90 days trading horizon Blue Coast Hotels is expected to generate 0.91 times more return on investment than Akme Fintrade. However, Blue Coast Hotels is 1.1 times less risky than Akme Fintrade. It trades about 0.46 of its potential returns per unit of risk. Akme Fintrade India is currently generating about -0.05 per unit of risk. If you would invest  1,051  in Blue Coast Hotels on October 25, 2024 and sell it today you would earn a total of  1,587  from holding Blue Coast Hotels or generate 151.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Blue Coast Hotels  vs.  Akme Fintrade India

Blue Coast Hotels

Risk-Adjusted Performance

36 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Coast Hotels are ranked lower than 36 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Blue Coast sustained solid returns over the last few months and may actually be approaching a breakup point.

Akme Fintrade India

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akme Fintrade India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Blue Coast and Akme Fintrade

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

The idea behind Blue Coast Hotels and Akme Fintrade India 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 Stocks Directory module to find actively traded stocks across global markets.