Correlation Between BF Investment and Yatra Online

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

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

Diversification Opportunities for BF Investment and Yatra Online

-0.61

Correlation Coefficient

BF Investment  Yatra Online

Excellent diversification

The 3 months correlation between BFINVEST and Yatra is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding BF Investment 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 BF Investment 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 BF Investment 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 BF Investment i.e., BF Investment and Yatra Online go up and down completely randomly.

Pair Corralation between BF Investment and Yatra Online

Assuming the 90 days trading horizon BF Investment Limited is expected to under-perform the Yatra Online. But the stock apears to be less risky and, when comparing its historical volatility, BF Investment Limited is 1.03 times less risky than Yatra Online. The stock trades about -0.22 of its potential returns per unit of risk. The Yatra Online Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  10,993  in Yatra Online Limited on October 10, 2024 and sell it today you would earn a total of  105.00  from holding Yatra Online Limited or generate 0.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

BF Investment Limited  vs.  Yatra Online Limited

BF Investment Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BF Investment Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, BF Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the 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 latest uncertain performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with BF Investment and Yatra Online

The main advantage of trading using opposite BF Investment and Yatra Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BF Investment 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 BF Investment 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.