Correlation Between Wingstop and Yatra Online

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

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

Diversification Opportunities for Wingstop and Yatra Online

0.61

Correlation Coefficient

Wingstop  Yatra Online

Poor diversification

The 3 months correlation between Wingstop and Yatra is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Wingstop and Yatra Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yatra Online and Wingstop 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 Wingstop 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 Wingstop i.e., Wingstop and Yatra Online go up and down completely randomly.

Pair Corralation between Wingstop and Yatra Online

Given the investment horizon of 90 days Wingstop is expected to generate 0.72 times more return on investment than Yatra Online. However, Wingstop is 1.39 times less risky than Yatra Online. It trades about 0.06 of its potential returns per unit of risk. Yatra Online is currently generating about -0.03 per unit of risk. If you would invest  16,915  in Wingstop on November 19, 2024 and sell it today you would earn a total of  13,554  from holding Wingstop or generate 80.13% return on investment over 90 days.

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

Wingstop  vs.  Yatra Online

Wingstop

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wingstop has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Yatra Online

Risk-Adjusted Performance

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 March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Wingstop and Yatra Online

The main advantage of trading using opposite Wingstop and Yatra Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wingstop 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 Wingstop 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.