Correlation Between Blue Coast and ITCHOTELS

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

Diversification Opportunities for Blue Coast and ITCHOTELS

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Blue and ITCHOTELS is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Blue Coast Hotels and ITCHOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITCHOTELS 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 ITCHOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITCHOTELS has no effect on the direction of Blue Coast i.e., Blue Coast and ITCHOTELS go up and down completely randomly.

Pair Corralation between Blue Coast and ITCHOTELS

Assuming the 90 days trading horizon Blue Coast Hotels is expected to under-perform the ITCHOTELS. In addition to that, Blue Coast is 2.95 times more volatile than ITCHOTELS. It trades about -0.2 of its total potential returns per unit of risk. ITCHOTELS is currently generating about -0.19 per unit of volatility. If you would invest  24,025  in ITCHOTELS on September 6, 2025 and sell it today you would lose (3,434) from holding ITCHOTELS or give up 14.29% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Blue Coast Hotels  vs.  ITCHOTELS

 Performance 
       Timeline  
Blue Coast Hotels 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Blue Coast Hotels has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2026. The current disturbance may also be a sign of long term up-swing for the company investors.
ITCHOTELS 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days ITCHOTELS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2026. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Blue Coast and ITCHOTELS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Blue Coast and ITCHOTELS

The main advantage of trading using opposite Blue Coast and ITCHOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Coast position performs unexpectedly, ITCHOTELS 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 ITCHOTELS will offset losses from the drop in ITCHOTELS's long position.
The idea behind Blue Coast Hotels and ITCHOTELS 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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