Correlation Between Yatra Online and Nippon Life

Can any of the company-specific risk be diversified away by investing in both Yatra Online and Nippon Life 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 Nippon Life 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 Nippon Life India, you can compare the effects of market volatilities on Yatra Online and Nippon Life 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 Nippon Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yatra Online and Nippon Life.

Diversification Opportunities for Yatra Online and Nippon Life

0.86

Correlation Coefficient

Yatra Online  Nippon Life

Very poor diversification

The 3 months correlation between Yatra and Nippon is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Yatra Online Limited and Nippon Life India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Life India 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 Nippon Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Life India has no effect on the direction of Yatra Online i.e., Yatra Online and Nippon Life go up and down completely randomly.

Pair Corralation between Yatra Online and Nippon Life

Assuming the 90 days trading horizon Yatra Online Limited is expected to under-perform the Nippon Life. But the stock apears to be less risky and, when comparing its historical volatility, Yatra Online Limited is 1.24 times less risky than Nippon Life. The stock trades about -0.18 of its potential returns per unit of risk. The Nippon Life India is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  68,550  in Nippon Life India on November 29, 2024 and sell it today you would lose (14,775) from holding Nippon Life India or give up 21.55% of portfolio value over 90 days.

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

Yatra Online Limited  vs.  Nippon Life India

Yatra Online Limited

Risk-Adjusted Performance

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

Nippon Life India

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nippon Life India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Yatra Online and Nippon Life

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

The idea behind Yatra Online Limited and Nippon Life India 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.

Check out your portfolio center.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.