Correlation Between SFL and Yatra Online
Can any of the company-specific risk be diversified away by investing in both SFL 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 SFL and Yatra Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SFL Corporation and Yatra Online, you can compare the effects of market volatilities on SFL 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 SFL with a short position of Yatra Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFL and Yatra Online.
Diversification Opportunities for SFL and Yatra Online
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SFL and Yatra is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SFL Corp. and Yatra Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yatra Online and SFL 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 SFL Corporation 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 SFL i.e., SFL and Yatra Online go up and down completely randomly.
Pair Corralation between SFL and Yatra Online
Considering the 90-day investment horizon SFL Corporation is expected to generate 0.4 times more return on investment than Yatra Online. However, SFL Corporation is 2.49 times less risky than Yatra Online. It trades about 0.03 of its potential returns per unit of risk. Yatra Online is currently generating about -0.08 per unit of risk. If you would invest 1,082 in SFL Corporation on August 24, 2024 and sell it today you would earn a total of 7.00 from holding SFL Corporation or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SFL Corp. vs. Yatra Online
Performance |
| Timeline |
| SFL Corporation |
| Yatra Online |
SFL and Yatra Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFL and Yatra Online
The main advantage of trading using opposite SFL and Yatra Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFL 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 SFL Corporation 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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