Correlation Between Yatra Online and Huazhu
Can any of the company-specific risk be diversified away by investing in both Yatra Online and Huazhu 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 Huazhu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yatra Online and Huazhu Group, you can compare the effects of market volatilities on Yatra Online and Huazhu 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 Huazhu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yatra Online and Huazhu.
Diversification Opportunities for Yatra Online and Huazhu
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Yatra and Huazhu is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Yatra Online and Huazhu Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huazhu Group 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 are associated (or correlated) with Huazhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huazhu Group has no effect on the direction of Yatra Online i.e., Yatra Online and Huazhu go up and down completely randomly.
Pair Corralation between Yatra Online and Huazhu
Given the investment horizon of 90 days Yatra Online is expected to under-perform the Huazhu. In addition to that, Yatra Online is 1.23 times more volatile than Huazhu Group. It trades about -0.02 of its total potential returns per unit of risk. Huazhu Group is currently generating about 0.0 per unit of volatility. If you would invest 4,117 in Huazhu Group on September 14, 2024 and sell it today you would lose (819.00) from holding Huazhu Group or give up 19.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yatra Online vs. Huazhu Group
Performance |
| Timeline |
| Yatra Online |
| Huazhu Group |
Yatra Online and Huazhu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yatra Online and Huazhu
The main advantage of trading using opposite Yatra Online and Huazhu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yatra Online position performs unexpectedly, Huazhu 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 Huazhu will offset losses from the drop in Huazhu's long position.| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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