Correlation Between Blue Coast and Gayatri Highways

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

Diversification Opportunities for Blue Coast and Gayatri Highways

0.4

Correlation Coefficient

Blue Coast  Gayatri Highways

Very weak diversification

The 3 months correlation between Blue and Gayatri is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Blue Coast Hotels and Gayatri Highways Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gayatri Highways 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 Gayatri Highways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gayatri Highways has no effect on the direction of Blue Coast i.e., Blue Coast and Gayatri Highways go up and down completely randomly.

Pair Corralation between Blue Coast and Gayatri Highways

Assuming the 90 days trading horizon Blue Coast is expected to generate 12.63 times less return on investment than Gayatri Highways. But when comparing it to its historical volatility, Blue Coast Hotels is 1.12 times less risky than Gayatri Highways. It trades about 0.02 of its potential returns per unit of risk. Gayatri Highways Limited is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  129.00  in Gayatri Highways Limited on April 20, 2025 and sell it today you would earn a total of  50.00  from holding Gayatri Highways Limited or generate 38.76% return on investment over 90 days.

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

Blue Coast Hotels  vs.  Gayatri Highways Limited

Blue Coast Hotels

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Coast Hotels are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Blue Coast is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Gayatri Highways

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gayatri Highways Limited are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical indicators, Gayatri Highways unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blue Coast and Gayatri Highways

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

The idea behind Blue Coast Hotels and Gayatri Highways Limited 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.