Correlation Between Blue Coast and IdeaForge Technology

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

Diversification Opportunities for Blue Coast and IdeaForge Technology

0.02

Correlation Coefficient

Blue Coast  IdeaForge Technology

Significant diversification

The 3 months correlation between Blue and IdeaForge is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Blue Coast Hotels and ideaForge Technology Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ideaForge Technology 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 IdeaForge Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ideaForge Technology has no effect on the direction of Blue Coast i.e., Blue Coast and IdeaForge Technology go up and down completely randomly.

Pair Corralation between Blue Coast and IdeaForge Technology

Assuming the 90 days trading horizon Blue Coast is expected to generate 4.34 times less return on investment than IdeaForge Technology. But when comparing it to its historical volatility, Blue Coast Hotels is 1.72 times less risky than IdeaForge Technology. It trades about 0.06 of its potential returns per unit of risk. ideaForge Technology Limited is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  37,640  in ideaForge Technology Limited on April 24, 2025 and sell it today you would earn a total of  16,855  from holding ideaForge Technology Limited or generate 44.78% return on investment over 90 days.

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

Blue Coast Hotels  vs.  ideaForge Technology Limited

Blue Coast Hotels

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Coast Hotels are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Blue Coast may actually be approaching a critical reversion point that can send shares even higher in August 2025.

ideaForge Technology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ideaForge Technology Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, IdeaForge Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blue Coast and IdeaForge Technology

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

The idea behind Blue Coast Hotels and ideaForge Technology 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..