Correlation Between Aban Offshore and Yatra Online

Can any of the company-specific risk be diversified away by investing in both Aban Offshore 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 Aban Offshore and Yatra Online into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aban Offshore Limited and Yatra Online Limited, you can compare the effects of market volatilities on Aban Offshore 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 Aban Offshore with a short position of Yatra Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aban Offshore and Yatra Online.

Diversification Opportunities for Aban Offshore and Yatra Online

0.9

Correlation Coefficient

Aban Offshore  Yatra Online

Almost no diversification

The 3 months correlation between Aban and Yatra is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Aban Offshore Limited and Yatra Online Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yatra Online Limited and Aban Offshore 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 Aban Offshore Limited 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 Limited has no effect on the direction of Aban Offshore i.e., Aban Offshore and Yatra Online go up and down completely randomly.

Pair Corralation between Aban Offshore and Yatra Online

Assuming the 90 days trading horizon Aban Offshore Limited is expected to generate 1.21 times more return on investment than Yatra Online. However, Aban Offshore is 1.21 times more volatile than Yatra Online Limited. It trades about 0.13 of its potential returns per unit of risk. Yatra Online Limited is currently generating about 0.14 per unit of risk. If you would invest  6,358  in Aban Offshore Limited on September 17, 2024 and sell it today you would earn a total of  355.00  from holding Aban Offshore Limited or generate 5.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Aban Offshore Limited  vs.  Yatra Online Limited

Aban Offshore Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aban Offshore Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Yatra Online Limited

Risk-Adjusted Performance

0 of 100

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 unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Aban Offshore and Yatra Online

The main advantage of trading using opposite Aban Offshore and Yatra Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aban Offshore 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 Aban Offshore Limited and Yatra Online 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.