Correlation Between Norwegian Cruise and Yatra Online

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

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

Diversification Opportunities for Norwegian Cruise and Yatra Online

-0.69

Correlation Coefficient

Norwegian Cruise  Yatra Online

Excellent diversification

The 3 months correlation between Norwegian and Yatra is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Cruise Line and Yatra Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yatra Online and Norwegian Cruise 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 Norwegian Cruise Line 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 has no effect on the direction of Norwegian Cruise i.e., Norwegian Cruise and Yatra Online go up and down completely randomly.

Pair Corralation between Norwegian Cruise and Yatra Online

Given the investment horizon of 90 days Norwegian Cruise Line is expected to generate 1.18 times more return on investment than Yatra Online. However, Norwegian Cruise is 1.18 times more volatile than Yatra Online. It trades about 0.15 of its potential returns per unit of risk. Yatra Online is currently generating about -0.15 per unit of risk. If you would invest  2,009  in Norwegian Cruise Line on October 6, 2024 and sell it today you would earn a total of  533.00  from holding Norwegian Cruise Line or generate 26.53% return on investment over 90 days.

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

Norwegian Cruise Line  vs.  Yatra Online

Norwegian Cruise Line

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Norwegian Cruise Line are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting essential indicators, Norwegian Cruise demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Yatra Online

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yatra Online has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Norwegian Cruise and Yatra Online

The main advantage of trading using opposite Norwegian Cruise and Yatra Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Cruise 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 Norwegian Cruise Line and Yatra Online 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.