Correlation Between Blue Coast and Osia Hyper

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

Diversification Opportunities for Blue Coast and Osia Hyper

0.37

Correlation Coefficient

Blue Coast  Osia Hyper

Weak diversification

The 3 months correlation between Blue and Osia is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Blue Coast Hotels and Osia Hyper Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osia Hyper Retail 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 Osia Hyper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osia Hyper Retail has no effect on the direction of Blue Coast i.e., Blue Coast and Osia Hyper go up and down completely randomly.

Pair Corralation between Blue Coast and Osia Hyper

Assuming the 90 days trading horizon Blue Coast Hotels is expected to generate 0.55 times more return on investment than Osia Hyper. However, Blue Coast Hotels is 1.83 times less risky than Osia Hyper. It trades about 0.16 of its potential returns per unit of risk. Osia Hyper Retail is currently generating about -0.01 per unit of risk. If you would invest  871.00  in Blue Coast Hotels on August 31, 2024 and sell it today you would earn a total of  127.00  from holding Blue Coast Hotels or generate 14.58% return on investment over 90 days.

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

Blue Coast Hotels  vs.  Osia Hyper Retail

Blue Coast Hotels

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Coast Hotels are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Blue Coast sustained solid returns over the last few months and may actually be approaching a breakup point.

Osia Hyper Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Osia Hyper Retail has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Osia Hyper is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Blue Coast and Osia Hyper

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

The idea behind Blue Coast Hotels and Osia Hyper Retail 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.