Correlation Between MakeMyTrip and Atour Lifestyle

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

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

Diversification Opportunities for MakeMyTrip and Atour Lifestyle

-0.57

Correlation Coefficient

MakeMyTrip  Atour Lifestyle

Excellent diversification

The 3 months correlation between MakeMyTrip and Atour is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding MakeMyTrip Limited and Atour Lifestyle Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atour Lifestyle Holdings and MakeMyTrip 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 MakeMyTrip Limited are associated (or correlated) with Atour Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atour Lifestyle Holdings has no effect on the direction of MakeMyTrip i.e., MakeMyTrip and Atour Lifestyle go up and down completely randomly.

Pair Corralation between MakeMyTrip and Atour Lifestyle

Given the investment horizon of 90 days MakeMyTrip Limited is expected to under-perform the Atour Lifestyle. In addition to that, MakeMyTrip is 1.21 times more volatile than Atour Lifestyle Holdings. It trades about -0.03 of its total potential returns per unit of risk. Atour Lifestyle Holdings is currently generating about 0.07 per unit of volatility. If you would invest  2,656  in Atour Lifestyle Holdings on December 29, 2024 and sell it today you would earn a total of  255.00  from holding Atour Lifestyle Holdings or generate 9.6% return on investment over 90 days.

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

MakeMyTrip Limited  vs.  Atour Lifestyle Holdings

MakeMyTrip Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days MakeMyTrip Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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.

Atour Lifestyle Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atour Lifestyle Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Atour Lifestyle may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with MakeMyTrip and Atour Lifestyle

The main advantage of trading using opposite MakeMyTrip and Atour Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MakeMyTrip position performs unexpectedly, Atour Lifestyle 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 Atour Lifestyle will offset losses from the drop in Atour Lifestyle's long position.

The idea behind MakeMyTrip Limited and Atour Lifestyle Holdings 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.