Correlation Between Granite Construction and YATRA ONLINE

Can any of the company-specific risk be diversified away by investing in both Granite Construction 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 Granite Construction and YATRA ONLINE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Granite Construction and YATRA ONLINE DL 0001, you can compare the effects of market volatilities on Granite Construction 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 Granite Construction with a short position of YATRA ONLINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and YATRA ONLINE.

Diversification Opportunities for Granite Construction and YATRA ONLINE

0.94

Correlation Coefficient

Granite Construction  YATRA ONLINE

Almost no diversification

The 3 months correlation between Granite and YATRA is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and YATRA ONLINE DL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YATRA ONLINE DL and Granite Construction 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 Granite Construction 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 DL has no effect on the direction of Granite Construction i.e., Granite Construction and YATRA ONLINE go up and down completely randomly.

Pair Corralation between Granite Construction and YATRA ONLINE

Assuming the 90 days trading horizon Granite Construction is expected to generate 0.56 times more return on investment than YATRA ONLINE. However, Granite Construction is 1.79 times less risky than YATRA ONLINE. It trades about -0.15 of its potential returns per unit of risk. YATRA ONLINE DL 0001 is currently generating about -0.2 per unit of risk. If you would invest  8,437  in Granite Construction on December 30, 2024 and sell it today you would lose (1,537) from holding Granite Construction or give up 18.22% of portfolio value over 90 days.

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

Granite Construction  vs.  YATRA ONLINE DL 0001

Granite Construction

Risk-Adjusted Performance

Very Weak

Over the last 90 days Granite Construction has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

YATRA ONLINE DL

Risk-Adjusted Performance

Very Weak

Over the last 90 days YATRA ONLINE DL 0001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Granite Construction and YATRA ONLINE

The main advantage of trading using opposite Granite Construction and YATRA ONLINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction 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 Granite Construction and YATRA ONLINE DL 0001 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.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.