Correlation Between Yatra Online and Sarveshwar Foods

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

Diversification Opportunities for Yatra Online and Sarveshwar Foods

0.29

Correlation Coefficient

Yatra Online  Sarveshwar Foods

Modest diversification

The 3 months correlation between Yatra and Sarveshwar is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Yatra Online Limited and Sarveshwar Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarveshwar Foods 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 Sarveshwar Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sarveshwar Foods has no effect on the direction of Yatra Online i.e., Yatra Online and Sarveshwar Foods go up and down completely randomly.

Pair Corralation between Yatra Online and Sarveshwar Foods

Assuming the 90 days trading horizon Yatra Online Limited is expected to under-perform the Sarveshwar Foods. But the stock apears to be less risky and, when comparing its historical volatility, Yatra Online Limited is 1.4 times less risky than Sarveshwar Foods. The stock trades about -0.16 of its potential returns per unit of risk. The Sarveshwar Foods Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,012  in Sarveshwar Foods Limited on September 17, 2024 and sell it today you would earn a total of  47.00  from holding Sarveshwar Foods Limited or generate 4.64% return on investment over 90 days.

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

Yatra Online Limited  vs.  Sarveshwar Foods 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 unsteady 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.

Sarveshwar Foods

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sarveshwar Foods Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Sarveshwar Foods may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Yatra Online and Sarveshwar Foods

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

The idea behind Yatra Online Limited and Sarveshwar Foods 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.