Correlation Between Imagicaaworld Entertainment and Blue Coast

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

By analyzing existing cross correlation between Imagicaaworld Entertainment Limited and Blue Coast Hotels, you can compare the effects of market volatilities on Imagicaaworld Entertainment and Blue Coast 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 Imagicaaworld Entertainment with a short position of Blue Coast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imagicaaworld Entertainment and Blue Coast.

Diversification Opportunities for Imagicaaworld Entertainment and Blue Coast

0.36

Correlation Coefficient

Imagicaaworld Entertainment  Blue Coast

Weak diversification

The 3 months correlation between Imagicaaworld and Blue is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Imagicaaworld Entertainment Li and Blue Coast Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Coast Hotels and Imagicaaworld Entertainment 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 Imagicaaworld Entertainment Limited are associated (or correlated) with Blue Coast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Coast Hotels has no effect on the direction of Imagicaaworld Entertainment i.e., Imagicaaworld Entertainment and Blue Coast go up and down completely randomly.

Pair Corralation between Imagicaaworld Entertainment and Blue Coast

Assuming the 90 days trading horizon Imagicaaworld Entertainment Limited is expected to generate 0.92 times more return on investment than Blue Coast. However, Imagicaaworld Entertainment Limited is 1.09 times less risky than Blue Coast. It trades about 0.0 of its potential returns per unit of risk. Blue Coast Hotels is currently generating about -0.06 per unit of risk. If you would invest  6,857  in Imagicaaworld Entertainment Limited on April 4, 2025 and sell it today you would lose (183.00) from holding Imagicaaworld Entertainment Limited or give up 2.67% of portfolio value over 90 days.

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

Imagicaaworld Entertainment Li  vs.  Blue Coast Hotels

Imagicaaworld Entertainment

Risk-Adjusted Performance

Very Weak

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

Blue Coast Hotels

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blue Coast Hotels has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Imagicaaworld Entertainment and Blue Coast

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

The idea behind Imagicaaworld Entertainment Limited and Blue Coast Hotels 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.