Correlation Between Yatra Online and ASK AUTOMOTIVE

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Can any of the company-specific risk be diversified away by investing in both Yatra Online and ASK AUTOMOTIVE 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 ASK AUTOMOTIVE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yatra Online Limited and ASK AUTOMOTIVE LIMITED, you can compare the effects of market volatilities on Yatra Online and ASK AUTOMOTIVE 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 ASK AUTOMOTIVE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yatra Online and ASK AUTOMOTIVE.

Diversification Opportunities for Yatra Online and ASK AUTOMOTIVE

0.02
  Correlation Coefficient

Significant diversification

The 3 months correlation between Yatra and ASK is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Yatra Online Limited and ASK AUTOMOTIVE LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASK AUTOMOTIVE 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 Limited are associated (or correlated) with ASK AUTOMOTIVE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASK AUTOMOTIVE has no effect on the direction of Yatra Online i.e., Yatra Online and ASK AUTOMOTIVE go up and down completely randomly.

Pair Corralation between Yatra Online and ASK AUTOMOTIVE

Assuming the 90 days trading horizon Yatra Online Limited is expected to under-perform the ASK AUTOMOTIVE. But the stock apears to be less risky and, when comparing its historical volatility, Yatra Online Limited is 1.36 times less risky than ASK AUTOMOTIVE. The stock trades about -0.13 of its potential returns per unit of risk. The ASK AUTOMOTIVE LIMITED is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  47,340  in ASK AUTOMOTIVE LIMITED on October 23, 2024 and sell it today you would lose (1,750) from holding ASK AUTOMOTIVE LIMITED or give up 3.7% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.0%
ValuesDaily Returns

Yatra Online Limited  vs.  ASK AUTOMOTIVE LIMITED

 Performance 
       Timeline  
Yatra Online Limited 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Yatra Online Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Yatra Online is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.
ASK AUTOMOTIVE 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in ASK AUTOMOTIVE LIMITED are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent essential indicators, ASK AUTOMOTIVE displayed solid returns over the last few months and may actually be approaching a breakup point.

Yatra Online and ASK AUTOMOTIVE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Yatra Online and ASK AUTOMOTIVE

The main advantage of trading using opposite Yatra Online and ASK AUTOMOTIVE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yatra Online position performs unexpectedly, ASK AUTOMOTIVE 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 ASK AUTOMOTIVE will offset losses from the drop in ASK AUTOMOTIVE's long position.
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The idea behind Yatra Online Limited and ASK AUTOMOTIVE LIMITED 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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