Correlation Between Electronics Mart and Yatra Online
Can any of the company-specific risk be diversified away by investing in both Electronics Mart and Yatra Online 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 Electronics Mart and Yatra Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronics Mart India and Yatra Online Limited, you can compare the effects of market volatilities on Electronics Mart and Yatra Online 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 Electronics Mart with a short position of Yatra Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronics Mart and Yatra Online.
Diversification Opportunities for Electronics Mart and Yatra Online
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Electronics and Yatra is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Electronics Mart India and Yatra Online Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yatra Online Limited and Electronics Mart 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 Electronics Mart India are associated (or correlated) with Yatra Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yatra Online Limited has no effect on the direction of Electronics Mart i.e., Electronics Mart and Yatra Online go up and down completely randomly.
Pair Corralation between Electronics Mart and Yatra Online
Assuming the 90 days trading horizon Electronics Mart India is expected to generate 1.23 times more return on investment than Yatra Online. However, Electronics Mart is 1.23 times more volatile than Yatra Online Limited. It trades about 0.06 of its potential returns per unit of risk. Yatra Online Limited is currently generating about -0.03 per unit of risk. If you would invest 8,490 in Electronics Mart India on August 24, 2024 and sell it today you would earn a total of 8,107 from holding Electronics Mart India or generate 95.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 57.96% |
| Values | Daily Returns |
Electronics Mart India vs. Yatra Online Limited
Performance |
| Timeline |
| Electronics Mart India |
| Yatra Online Limited |
Electronics Mart and Yatra Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronics Mart and Yatra Online
The main advantage of trading using opposite Electronics Mart and Yatra Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronics Mart position performs unexpectedly, Yatra Online 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 Yatra Online will offset losses from the drop in Yatra Online's long position.| Electronics Mart vs. Kewal Kiran Clothing | Electronics Mart vs. Ortel Communications Limited | Electronics Mart vs. Zodiac Clothing | Electronics Mart vs. Indian Card Clothing |
| Yatra Online vs. Reliance Industries Limited | Yatra Online vs. Indian Oil | Yatra Online vs. HDFC Bank Limited | Yatra Online vs. Divis Laboratories Limited |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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