Correlation Between Blue Coast and Rajshree Sugars

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

Diversification Opportunities for Blue Coast and Rajshree Sugars

0.0

Correlation Coefficient

Blue Coast  Rajshree Sugars

Pay attention - limited upside

The 3 months correlation between Blue and Rajshree is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Blue Coast Hotels and Rajshree Sugars Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rajshree Sugars Chemicals 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 Rajshree Sugars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rajshree Sugars Chemicals has no effect on the direction of Blue Coast i.e., Blue Coast and Rajshree Sugars go up and down completely randomly.

Pair Corralation between Blue Coast and Rajshree Sugars

Assuming the 90 days trading horizon Blue Coast Hotels is expected to generate 1.06 times more return on investment than Rajshree Sugars. However, Blue Coast is 1.06 times more volatile than Rajshree Sugars Chemicals. It trades about -0.02 of its potential returns per unit of risk. Rajshree Sugars Chemicals is currently generating about -0.04 per unit of risk. If you would invest  3,225  in Blue Coast Hotels on April 22, 2025 and sell it today you would lose (122.00) from holding Blue Coast Hotels or give up 3.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Blue Coast Hotels  vs.  Rajshree Sugars Chemicals

Blue Coast Hotels

Risk-Adjusted Performance

Weak

Over the last 90 days Blue Coast Hotels has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Blue Coast is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Rajshree Sugars Chemicals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rajshree Sugars Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Rajshree Sugars is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Blue Coast and Rajshree Sugars

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

The idea behind Blue Coast Hotels and Rajshree Sugars Chemicals 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 Transaction History module to view history of all your transactions and understand their impact on performance.