Correlation Between YATRA ONLINE and Lifeway Foods

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Can any of the company-specific risk be diversified away by investing in both YATRA ONLINE and Lifeway Foods 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 YATRA ONLINE and Lifeway Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YATRA ONLINE DL 0001 and Lifeway Foods, you can compare the effects of market volatilities on YATRA ONLINE and Lifeway Foods 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 YATRA ONLINE with a short position of Lifeway Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of YATRA ONLINE and Lifeway Foods.

Diversification Opportunities for YATRA ONLINE and Lifeway Foods

0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between YATRA and Lifeway is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding YATRA ONLINE DL 0001 and Lifeway Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeway Foods and YATRA ONLINE 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 YATRA ONLINE DL 0001 are associated (or correlated) with Lifeway Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifeway Foods has no effect on the direction of YATRA ONLINE i.e., YATRA ONLINE and Lifeway Foods go up and down completely randomly.

Pair Corralation between YATRA ONLINE and Lifeway Foods

Assuming the 90 days horizon YATRA ONLINE DL 0001 is expected to under-perform the Lifeway Foods. In addition to that, YATRA ONLINE is 1.05 times more volatile than Lifeway Foods. It trades about -0.15 of its total potential returns per unit of risk. Lifeway Foods is currently generating about -0.06 per unit of volatility. If you would invest  2,260  in Lifeway Foods on October 30, 2024 and sell it today you would lose (60.00) from holding Lifeway Foods or give up 2.65% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

YATRA ONLINE DL 0001  vs.  Lifeway Foods

 Performance 
       Timeline  
YATRA ONLINE DL 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days YATRA ONLINE DL 0001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
Lifeway Foods 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Lifeway Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Lifeway Foods is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

YATRA ONLINE and Lifeway Foods Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with YATRA ONLINE and Lifeway Foods

The main advantage of trading using opposite YATRA ONLINE and Lifeway Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YATRA ONLINE position performs unexpectedly, Lifeway Foods 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 Lifeway Foods will offset losses from the drop in Lifeway Foods' long position.
The idea behind YATRA ONLINE DL 0001 and Lifeway Foods 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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