Correlation Between Huazhu and Yatra Online
Can any of the company-specific risk be diversified away by investing in both Huazhu 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 Huazhu and Yatra Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huazhu Group and Yatra Online, you can compare the effects of market volatilities on Huazhu 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 Huazhu with a short position of Yatra Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huazhu and Yatra Online.
Diversification Opportunities for Huazhu and Yatra Online
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Huazhu and Yatra is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Huazhu Group and Yatra Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yatra Online and Huazhu 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 Huazhu Group 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 has no effect on the direction of Huazhu i.e., Huazhu and Yatra Online go up and down completely randomly.
Pair Corralation between Huazhu and Yatra Online
Given the investment horizon of 90 days Huazhu Group is expected to generate 0.85 times more return on investment than Yatra Online. However, Huazhu Group is 1.18 times less risky than Yatra Online. It trades about 0.01 of its potential returns per unit of risk. Yatra Online is currently generating about 0.0 per unit of risk. If you would invest 3,299 in Huazhu Group on September 14, 2024 and sell it today you would lose (1.00) from holding Huazhu Group or give up 0.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huazhu Group vs. Yatra Online
Performance |
| Timeline |
| Huazhu Group |
| Yatra Online |
Huazhu and Yatra Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huazhu and Yatra Online
The main advantage of trading using opposite Huazhu and Yatra Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huazhu 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.The idea behind Huazhu Group and Yatra Online 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.| Yatra Online vs. Despegar Corp | Yatra Online vs. Lindblad Expeditions Holdings | Yatra Online vs. Mondee Holdings | Yatra Online vs. Trip Group Ltd |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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