Correlation Between Yatra Online and JGCHEMICALS

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

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

Diversification Opportunities for Yatra Online and JGCHEMICALS

-0.17

Correlation Coefficient

Yatra Online  JGCHEMICALS

Good diversification

The 3 months correlation between Yatra and JGCHEMICALS is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Yatra Online Limited and JGCHEMICALS LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JGCHEMICALS LIMITED and Yatra Online 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 Yatra Online Limited are associated (or correlated) with JGCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JGCHEMICALS LIMITED has no effect on the direction of Yatra Online i.e., Yatra Online and JGCHEMICALS go up and down completely randomly.

Pair Corralation between Yatra Online and JGCHEMICALS

Assuming the 90 days trading horizon Yatra Online Limited is expected to generate 1.17 times more return on investment than JGCHEMICALS. However, Yatra Online is 1.17 times more volatile than JGCHEMICALS LIMITED. It trades about 0.17 of its potential returns per unit of risk. JGCHEMICALS LIMITED is currently generating about -0.2 per unit of risk. If you would invest  10,377  in Yatra Online Limited on September 27, 2024 and sell it today you would earn a total of  916.00  from holding Yatra Online Limited or generate 8.83% return on investment over 90 days.

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

Yatra Online Limited  vs.  JGCHEMICALS LIMITED

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 unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

JGCHEMICALS LIMITED

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JGCHEMICALS LIMITED are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical indicators, JGCHEMICALS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Yatra Online and JGCHEMICALS

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

The idea behind Yatra Online Limited and JGCHEMICALS 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.