Correlation Between LT Technology and Yatra Online

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

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

Diversification Opportunities for LT Technology and Yatra Online

-0.13

Correlation Coefficient

LT Technology  Yatra Online

Good diversification

The 3 months correlation between LTTS and Yatra is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding LT Technology Services 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 LT Technology 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 LT Technology Services 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 LT Technology i.e., LT Technology and Yatra Online go up and down completely randomly.

Pair Corralation between LT Technology and Yatra Online

Assuming the 90 days trading horizon LT Technology Services is expected to generate 0.71 times more return on investment than Yatra Online. However, LT Technology Services is 1.41 times less risky than Yatra Online. It trades about 0.05 of its potential returns per unit of risk. Yatra Online Limited is currently generating about -0.02 per unit of risk. If you would invest  334,599  in LT Technology Services on October 9, 2024 and sell it today you would earn a total of  141,771  from holding LT Technology Services or generate 42.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	64.48%
Values	Daily Returns

LT Technology Services  vs.  Yatra Online Limited

LT Technology Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LT Technology Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady 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 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 LT Technology and Yatra Online

The main advantage of trading using opposite LT Technology and Yatra Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LT Technology 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 LT Technology Services 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.