Correlation Between Blue Star and Dalata Hotel

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

By analyzing existing cross correlation between Blue Star Capital and Dalata Hotel Group, you can compare the effects of market volatilities on Blue Star and Dalata Hotel 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 Star with a short position of Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Star and Dalata Hotel.

Diversification Opportunities for Blue Star and Dalata Hotel

0.88

Correlation Coefficient

Blue Star  Dalata Hotel

Very poor diversification

The 3 months correlation between Blue and Dalata is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Capital and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group and Blue Star 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 Star Capital are associated (or correlated) with Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of Blue Star i.e., Blue Star and Dalata Hotel go up and down completely randomly.

Pair Corralation between Blue Star and Dalata Hotel

Assuming the 90 days trading horizon Blue Star Capital is expected to generate 14.11 times more return on investment than Dalata Hotel. However, Blue Star is 14.11 times more volatile than Dalata Hotel Group. It trades about 0.15 of its potential returns per unit of risk. Dalata Hotel Group is currently generating about 0.23 per unit of risk. If you would invest  525.00  in Blue Star Capital on April 23, 2025 and sell it today you would earn a total of  1,175  from holding Blue Star Capital or generate 223.81% return on investment over 90 days.

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

Blue Star Capital  vs.  Dalata Hotel Group

Blue Star Capital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Star Capital are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Blue Star exhibited solid returns over the last few months and may actually be approaching a breakup point.

Dalata Hotel Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dalata Hotel Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Dalata Hotel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blue Star and Dalata Hotel

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

The idea behind Blue Star Capital and Dalata Hotel Group 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.