Correlation Between Yatra Online and Electronics Mart
Can any of the company-specific risk be diversified away by investing in both Yatra Online and Electronics Mart 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 Electronics Mart 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 Electronics Mart India, you can compare the effects of market volatilities on Yatra Online and Electronics Mart 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 Electronics Mart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yatra Online and Electronics Mart.
Diversification Opportunities for Yatra Online and Electronics Mart
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yatra and Electronics is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Yatra Online Limited and Electronics Mart India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronics Mart India 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 Electronics Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronics Mart India has no effect on the direction of Yatra Online i.e., Yatra Online and Electronics Mart go up and down completely randomly.
Pair Corralation between Yatra Online and Electronics Mart
Assuming the 90 days trading horizon Yatra Online Limited is expected to under-perform the Electronics Mart. But the stock apears to be less risky and, when comparing its historical volatility, Yatra Online Limited is 1.23 times less risky than Electronics Mart. The stock trades about -0.03 of its potential returns per unit of risk. The Electronics Mart India is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,500 in Electronics Mart India on August 28, 2024 and sell it today you would earn a total of 9,050 from holding Electronics Mart India or generate 106.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 58.28% |
| Values | Daily Returns |
Yatra Online Limited vs. Electronics Mart India
Performance |
| Timeline |
| Yatra Online Limited |
| Electronics Mart India |
Yatra Online and Electronics Mart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yatra Online and Electronics Mart
The main advantage of trading using opposite Yatra Online and Electronics Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yatra Online position performs unexpectedly, Electronics Mart 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 Electronics Mart will offset losses from the drop in Electronics Mart's long position.| Yatra Online vs. Max Healthcare Institute | Yatra Online vs. Jindal Poly Investment | Yatra Online vs. MEDI ASSIST HEALTHCARE | Yatra Online vs. Medplus Health Services |
| Electronics Mart vs. Kingfa Science Technology | Electronics Mart vs. Rico Auto Industries | Electronics Mart vs. GACM Technologies Limited | Electronics Mart vs. COSMO FIRST 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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