Correlation Between YATRA ONLINE and CHINA HUARONG
Can any of the company-specific risk be diversified away by investing in both YATRA ONLINE and CHINA HUARONG 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 CHINA HUARONG 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 CHINA HUARONG ENERHD 50, you can compare the effects of market volatilities on YATRA ONLINE and CHINA HUARONG 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 CHINA HUARONG. Check out your portfolio center. Please also check ongoing floating volatility patterns of YATRA ONLINE and CHINA HUARONG.
Diversification Opportunities for YATRA ONLINE and CHINA HUARONG
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between YATRA and CHINA is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding YATRA ONLINE DL 0001 and CHINA HUARONG ENERHD 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA HUARONG ENERHD 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 CHINA HUARONG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA HUARONG ENERHD has no effect on the direction of YATRA ONLINE i.e., YATRA ONLINE and CHINA HUARONG go up and down completely randomly.
Pair Corralation between YATRA ONLINE and CHINA HUARONG
Assuming the 90 days horizon YATRA ONLINE DL 0001 is expected to under-perform the CHINA HUARONG. But the stock apears to be less risky and, when comparing its historical volatility, YATRA ONLINE DL 0001 is 15.11 times less risky than CHINA HUARONG. The stock trades about -0.1 of its potential returns per unit of risk. The CHINA HUARONG ENERHD 50 is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.15 in CHINA HUARONG ENERHD 50 on October 22, 2024 and sell it today you would lose (0.05) from holding CHINA HUARONG ENERHD 50 or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YATRA ONLINE DL 0001 vs. CHINA HUARONG ENERHD 50
Performance |
| Timeline |
| YATRA ONLINE DL |
| CHINA HUARONG ENERHD |
YATRA ONLINE and CHINA HUARONG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YATRA ONLINE and CHINA HUARONG
The main advantage of trading using opposite YATRA ONLINE and CHINA HUARONG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YATRA ONLINE position performs unexpectedly, CHINA HUARONG 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 CHINA HUARONG will offset losses from the drop in CHINA HUARONG's long position.| YATRA ONLINE vs. Zijin Mining Group | YATRA ONLINE vs. HUTCHISON TELECOMM | YATRA ONLINE vs. SK TELECOM TDADR | YATRA ONLINE vs. GALENA MINING LTD |
| CHINA HUARONG vs. YATRA ONLINE DL 0001 | CHINA HUARONG vs. Lamar Advertising | CHINA HUARONG vs. GWILLI FOOD | CHINA HUARONG vs. PLANT VEDA FOODS |
Check out your portfolio center.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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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